17 September 2012
As per notification No. 30/2012 dated 20.06.2012, If any individual or HUF or partnership firm is providing supply of manpower of service for any purpose to business entity registered as a body corporate, then the service provider will be liable to pay 25% of service tax and service receiver will be liable to pay 75% of service tax. I am service receiver so i will liable to pay the tax on 75% & shall i avail the CENVAT credit of service tax paid on 75% or 25% or both. Recruitment agency also comes in this categary. please reply me.
17 September 2012
Provided other relevant conditions are fulfilled, you will be eligible to claim cenvat credit on both portions - on the 25% charged by SP based on their Invoice, and on the 75% payable by you based on the Challan of payment of Service Tax.
20 September 2012
As per my opinion Recruitment agency is a Manpower Supply agency and Reverse charge is applicable. Input can be taken on both portions
21 September 2012
Please see definition of manpower supply in earlier section 65 - it clearly included recruitment services; unless the definition is clearly specified changed by new provisions, the earlier definition will continue. Discussions are welcome.
21 September 2012
The word 'manpower supply ' has not been defined under negative list of services, however, we can refer to the earlier service tax provisions where in the word manpower supply has been defined as follows:
"supply of manpower temporarily or otherwise to another person under his superintendence or control"
Similarly, the word recruitment agency has not been defined under negative list of services, however, we can refer to the earlier service tax provisions where in the word recruitment agency service has been as follows:
"manpower recruitment agency means any commercial concern engaged in providing any service directly or indirectly, in any manner for recruitment of manpower to a client."
The above two definition has a clear distinction in the nature of services to be provided. In view of the above I feel that recruitment agency service provider is liable to pay full service tax on his own.
21 September 2012
The definitions for "recruitment" and "supply" of manpower were combined by later amendments and section 65(68) makes both these activities taxable under a common nomenclature "manpower recruitment and supply agency". reference may also be made to Board's clarification vide TRU's letter No. B1/6/2005 dated 27-07-2005. Considering this reverse charge would apply on recruitment as well as supply services.
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