Hello Dear,
As per service tax rules, service tax 12.36% calculate on total bill of contractor means contract workers salary and contractor's service charge. Company is reibursing the salary to contract by way of contractor's bill. Contracotr's income is only their service. So, why we pay service tax pay on total bill. Also, copmany is giving company share of PF to contractor and goverment taking service tax on that. As per my opinion service tax should be on service charge of contractor.
Please give your valuable comments.
Thanking you,
IM Gandhi
From India, Mumbai
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As per service tax rules, service tax 12.36% calculate on total bill of contractor means contract workers salary and contractor's service charge. Company is reibursing the salary to contract by way of contractor's bill. Contracotr's income is only their service. So, why we pay service tax pay on total bill. Also, copmany is giving company share of PF to contractor and goverment taking service tax on that. As per my opinion service tax should be on service charge of contractor.
Please give your valuable comments.
Thanking you,
IM Gandhi
From India, Mumbai
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"Service Tax being in nature of a consumption tax, ultimate service tax burden is on the consumer of services and not on the provider of service."
From India, Bangalore
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From India, Bangalore
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Dear Mr. Gandhi,
Your opinion is not correct. Much has been discussed on the matter, and a number of cases have been filed before various High Courts. Finally, the Supreme Court held that the Service Tax is payable on the entire amount of the Contractor Bill, with certain exceptions based on the nature of the contract. If the contract involves manpower supply and other labor-oriented jobs, you have to consider the Service Tax on the entire bill. The treatment is different for construction contractors, transport contractors, etc., where a certain percentage of the contractual amount has to be taken into account for the purpose of Service Tax payment.
Venkatartnam Sanagapalli
From India, Hyderabad
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19Your opinion is not correct. Much has been discussed on the matter, and a number of cases have been filed before various High Courts. Finally, the Supreme Court held that the Service Tax is payable on the entire amount of the Contractor Bill, with certain exceptions based on the nature of the contract. If the contract involves manpower supply and other labor-oriented jobs, you have to consider the Service Tax on the entire bill. The treatment is different for construction contractors, transport contractors, etc., where a certain percentage of the contractual amount has to be taken into account for the purpose of Service Tax payment.
Venkatartnam Sanagapalli
From India, Hyderabad
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