Sevice Tax on Manpower Supply

This query is : Resolved

Ashok (Querist)
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21 December 2007 Hi

One of my client is in the business of Supply of manpower for construction of building. His receipts for F.Y.2006-07 was Rs.25 Lacs. Even during this year F.Y.2007-08 his receipts already exceeded Rs.8 Lacs. Now he want to apply for ST regn.
Can anybody guide me on this issue.
From which date he should apply for ST regn? What will be the interest & penalty?
What should he do if some of his clients will not pay ST portion?
Is there any wayout?

Thanks

Dayal

Dayal (Expert)
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30 January 2008 Once it is identified that he is providing manpower, it is a notified taxable service under the category of Manpower Recruitment and Supply Agency 65(105)(k)

A suitable application in form ST1 to be made to the authorities immediately.

Registration will be granted from the date of application, however previous period liability will have to be discharged.

For the period 2006-2007 service tax will be payable after the threshold limit of 4 lakhs i.e service tax will be payable on 21 lakhs (25-4)

In the subsequent year 2007-08 he cannot exercise SSP provisions has be has crossed the threshold limit in the previous financial period

The Rate of interest applicable is 13%

For example liability of April-06 was payable on 5th May –06 interest for april will be payble form 6th May till the date of payment. And this will be applicable for subsequent months.

His clients can claim Service tax paid by your client as input credit.

If however he is off hand aware that is clients will not pay, then he can treat the amount received by him as inclusive of service tax and work backwards

For more details visit https://www.caclubindia.com/homepage/DM%20Associate/

As our Hon’ble Finance Minister has clarified , do not seek ways and means to play around with the law, spend your quality time with your family, take a walk, enjoy the nature and leave the law to be managed by the law makers

Dayal

Dayal (Expert)
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30 January 2008 Should you need any further clarification do write back on associatedm@gmail.com

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