I am a Manpower services provider. Now I have a query regarding the service Tax. I am already registerd in Service tax Dept since 2 yrs and I am collecting ser. tax from my clients and I am filing the return for the same as well.
Now I have started the pay-roll service, where I shall put my employees on deputation to my clients. I shall charge their salary + My service charges + Service Tax from the clients on monthly basis.
Now the salary of the candidate will be decided by my client , I shall have to charge 10% additional as my services charges + ser. tax
Now my queries is
suppose my client has hired my employee at Rs 5000 per month so my bill would be as under
5000 (candidate salary)
+500 (My service charge)
Service Tax (@10.30% of what???????? )
now please help me on which amount I should charge the Ser.tax???
is it should be chargerd on 500 Rs (Which is my service charge) or is it should be on 5500 (The total bill amount) ???
Few of my colleagues have suggested me that the Ser.tax should be always on total bill amount, now if that is the case then for the client he has to pay around 22% more on the salary paid to the candidate. so it would be expensive from his part, and may not be ready to give the service tax???
Please guide me for the same
