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
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
"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
From India, Bangalore
Dear Mr Gandhi
Your opinion is not correct. Much was discussed on the matter and number of cases filed before various High Courts and finally Supreme Court held that the Service Tax is payable on the entire amount of Contractor Bill with certain exceptions keeping in view the nature of Contract. If the nature of contract is Manpower supply and other labour oriented jobs you have to consider the Service Tax on the entire Bill. It is different in case of Construction contractors, Transport contractors etc. where in certain percentage of the contractual amount has to be taken for the purpose of Service Tax payment.
Venkatartnam sanagapalli
From India, Hyderabad
14Your opinion is not correct. Much was discussed on the matter and number of cases filed before various High Courts and finally Supreme Court held that the Service Tax is payable on the entire amount of Contractor Bill with certain exceptions keeping in view the nature of Contract. If the nature of contract is Manpower supply and other labour oriented jobs you have to consider the Service Tax on the entire Bill. It is different in case of Construction contractors, Transport contractors etc. where in certain percentage of the contractual amount has to be taken for the purpose of Service Tax payment.
Venkatartnam sanagapalli
From India, Hyderabad
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Service Tax.pdf