Aplicability

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

19 December 2013
A contractor providing labour in the factory ,so the contractor will charge service tax ?

if it is yes ..but the contractor is not charging the service tax than what the company should do.

CA Vikas Acharya

CA Vikas Acharya (Expert)
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19 December 2013 YES, he should charge the same if he is liable under service tax, i.e, if his total services crosses 10 lacs in a financial year.

COMPANIE'S LAIBILTIY:
the service is manpower supply service.
for this if the contractor is not a co./body corporate meaning thereby is that the provider is individual, huf, partnership etc.. then the receiver co. (if body corporate) has to pay 75% of the tax.
so on total labor charges pay 9.27% i.e, 75% of 12.36%.
the above is due to application of reverse charge rule.
if the co. pays this, it is paying its liability & can claim the same as cenvat credit if on the basis of challan if providing any output service subject to ccr rules