29 February 2012
Yes; service tax liability is there for your friend. There is no composition scheme available as it is pure provision of manpower service and no involvement of any material. Service tax is applicable @ 12.36%. However, if this is the first year of provision of such service by your friend and assuming he has not provided any services to anybody, he need not pay ST of first 10 lacs (being basic exemption limit). However, if you opt for registration now and want to pay ST, the department people may ask interest on late payment of ST, penalty for providing service without registering and penalty for late filing of ST3 return.
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