Service tax by manpower recruitment agency

This query is : Resolved

Pardeep Gupta (Querist)
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18 May 2012 Dear Sir,

We are taking the services of security agency, which is providing office boy security personal etc to us.They bill us as under:

Salary paid to workers=200000
Service charges @10% = 20000
Total amount = 220000
Service Tax 12.36% 27192

My question is that
1.whether security agency is justified to charge service tax under manpower recruitment agency.
2.If yes whether they should charges service tax on gross amount of Rs.222000/- or only on their service charges portion.

It would be great if query can be resolved with some case law or departmental clarification.

Regards
pardeep
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