Service tax on statutory dues
Rama mohan Acharya
(Querist) 26 November 2010
This query is : Resolved
In an industrial establishment a contract has been awarded to a contractor to supply manpower.It is stated that the contractor has to fulfill all statutory obligation and the same shall be reimbursed by the principal employer.In this context my querry is the service tax will be paid on which amount? whether on the service charges(contractor's Profit) only or on the entire amount of bill which included minimum wages,PF,Leave encashment, bonus etc?
Kindly advise
A V Vishal
(Expert) 26 November 2010
Service tax is to be charged on the full amount of the consideration for the supply of manpower,whether full time or part time. The value includes recovery of staff costs from the recipient e.g. salary and other contributions. Even if the arrangement does not involve the recipient paying these staff costs to the supplier (because the salary is paid directly to the individual or contributions are paid to the respective authorities) these amounts are still part of the consideration and hence form part of the gross amount.
Vishnu Promod Srivastava
(Expert) 27 November 2010
I ALSO AGREE WITH Mr. Vishal. The service tax is charged on gross amount received.
Vishnu P.Srivastava Advocate
