Dear Mr. Banerjee,
We provide manpower services on contracts, and we are a proprietary firm. Kindly elaborate on the TDS and service tax rates/applicability in relation to:
1) Contracting with proprietary firms.
2) Contracting with private Ltd & Ltd companies.
3) Residential and co-op societies.
4) Hospitals and educational institutes.
5) Clubs and NGOs.
Recently, I came across a hospital client stating we are exempted from ESIC because it's a hospital. Is it so? How can we extend benefits to our manpower in such a case? Will the hospital be able to provide insurance cover/disability benefits, etc.?
From India, Vadodara
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418We provide manpower services on contracts, and we are a proprietary firm. Kindly elaborate on the TDS and service tax rates/applicability in relation to:
1) Contracting with proprietary firms.
2) Contracting with private Ltd & Ltd companies.
3) Residential and co-op societies.
4) Hospitals and educational institutes.
5) Clubs and NGOs.
Recently, I came across a hospital client stating we are exempted from ESIC because it's a hospital. Is it so? How can we extend benefits to our manpower in such a case? Will the hospital be able to provide insurance cover/disability benefits, etc.?
From India, Vadodara
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For manpower services, you fall under the contractor in TDS rules.
So if you are a direct contractor, they will deduct 2% of the bill amount.
If you are a subcontractor, the main contractor is required to deduct 1%.
Proprietary firms with a turnover of less than 40 Lakhs a year (I think now increased to 1 cr) need not deduct TDS from your payments.
The current rule is that TDS will be deducted on the gross bill before service tax. Earlier, it was on the total bill amount.
If you are covered under ESIC, and the location where employees are posted is also covered under ESIC, then you need to pay ESIC irrespective of who the principal employer is. So, even if the hospital themselves were not covered in ESIC, you still need to pay for your employees.
As per the rules, the hospital can get an exemption for you, but it's a very time-consuming process. Furthermore, what happens when an employee is shifted from that location to another location? I do not think it's a good idea to go for the exemption rule.
Hope I have answered your question.
From India, Mumbai
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So if you are a direct contractor, they will deduct 2% of the bill amount.
If you are a subcontractor, the main contractor is required to deduct 1%.
Proprietary firms with a turnover of less than 40 Lakhs a year (I think now increased to 1 cr) need not deduct TDS from your payments.
The current rule is that TDS will be deducted on the gross bill before service tax. Earlier, it was on the total bill amount.
If you are covered under ESIC, and the location where employees are posted is also covered under ESIC, then you need to pay ESIC irrespective of who the principal employer is. So, even if the hospital themselves were not covered in ESIC, you still need to pay for your employees.
As per the rules, the hospital can get an exemption for you, but it's a very time-consuming process. Furthermore, what happens when an employee is shifted from that location to another location? I do not think it's a good idea to go for the exemption rule.
Hope I have answered your question.
From India, Mumbai
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Also, please note that service tax is applicable at a uniform rate of 12.36% on all invoices you raise. However, in the case of customers who are companies, the reverse charge rule applies. Under this rule, the company will pay the service tax directly on your bill, and you need not charge the same. If you already have a service tax number and charge directly, inform the company of the same so they don't pay in addition.
From India, Mumbai
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From India, Mumbai
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Salary with TDS Calculation-Fin al Amended for net.xls
TDS Calculation.doc x