leviability of service tax - Commission on Contract labour, Service Tax

[nawal]

if i m providing contract labour to companies on a monthly charge of rs.5000/- & my commission is 10%i.e.500/- now whether service tax is chargeable on rs.500/- or 5500/-. if service tax charge on rs.5500/-than under which head, it is taxable.

Posts / Replies

[Paramjit]

It is not clarified that whether labour supplied by you is skilled/unskilled labour only or it is Security Man.

[S Gupta]

Service tax is payable on gross amount charged agaist the taxable services provided. In your case gross amount is Rs. 5500/-/ Therefore service tax is chargeable on Rs. 5500/-.

[preeti]

Only on Rs 500 u need to provide for service tax but in the bill it should be evident from documents that 5000 u r reeving for labour supply and paying to labour.See notification 12/03

[Rakesh Arora]

Till the time you yourself are receiving the total amount of Rs.5500, S.Tax is chargeable on the whole amount. However if you receive commission Rs. 500 and manage to get Rs.5000 straight to the labour, S.Tax is chargeable on the amount of commission received by you i.e. on Rs.500/-.

[Brijesh C Verma]

Section 67 of the Finance Act 1994 specifically states that service tax shall be charged on the 'Gross Amount Charged by the Service Provider'. There cannot be any doubt that the gross amount charged by you would not include 'the amount of Rs. 5,000, subsequently paid by you '. In my opinion therefore, tax is required to be paid on the full amount. This tax is required to be paid under the category 'Manpower Recruitment or Supply Agency's Services'.