Applicability of service tax - recruitment and supply of man power, Service Tax

[kaushal Arora]

There are two companies under same management. one company is using employees of other company. and in consideration paying sum of Rs. 2 lacs per year. whether this receipt is taxable under " recruitment and supply of man power" .

Posts / Replies

[CA Tilak Minocha]

Since the amount is less than exemption limit, no service tax is applicable. If amount exceeds exemption limit it will be applicbale whether it is a group company.

[Surender Gupta]

Purpose and details analysis of situation would only assist to classify the correct category of taxable service. For an example, it might be "recruitment and supply of manpower" or "Business support" or "Business Auxiliary" or some other category. However, as long as your turnover is less that Rs. 8 lacs (Rs. 4 lacs for the F. Y. 2006-07) in the previous year, no need to worry.