Employee or consultant for the purpose of service tax

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

25 March 2013 Hi Mr. A retires from XYZ Co. due to superannuation. The company makes a contract with him as Advisor and continues his service. He does not provide consultancy or advisory services to any other company. Is he a consultant for the purpose of service tax and is he liable to service tax? Kindly provide the relevant sections and case-laws for your answers.

Will the nomenclature (Advisor) change help in anyway?

Thanks in Advance.

CA Mahavir Shah

CA Mahavir Shah (Expert)
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26 March 2013 Whether to consider him as an employee or consultant or adviser depends on the wordings used in contract.
If his fees exceeds Rs.10 Lac during the year than he needs to collect & deposit Service Tax.

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Querist : Anonymous

Querist : Anonymous (Querist)

26 March 2013 The company deducts TDS and provides Form 16A and the words used are Advisor.

It is a manufacturing listed co.

Will the co. get CENVAT Credit and deduction from their excise payable on service tax charged/payable to Mr. A

Thanks in Advance.

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CA Mahavir Shah

CA Mahavir Shah (Expert)
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28 March 2013 Yes, you can claim CENVAT.