11 April 2014
service tax on supply of mechanics to a state owned Public transport corp.(incorporated under a state Act) on contract basis charging fee on a monthly basis per person.
1)whether service tax is exempted on such service? 2) if service tax is applicable, whether reverse charge mechanism is applicable for this contract? is it compulsory to apply reverse charge mechanism or can we charge Service tax at normal rates? 3) whether any abatement is available for this service? 4) whether service tax is to be charged on whole amount (salary+pf+esi+margin)?
12 April 2014
As per my view its a case of supply of manpower.Please Note:
1)Service Tax is payable as supply of manpower to a State owned Public transport is neither specified in Negative List under Section 66D nor specified in Mega Exemption Notification 26/2012 .
2)Reverse charge mechanism shall apply if the service provider is a individual,HUF,Firm or AOP and the service receiver is a Body Corporate.It is compulsory to pay service tax under reverse charge if reverse charge is applicable.
3)There is no abatement.service tax shall be paid @ 12.36%
4)Service tax shall be paid on gross amount inclusive of (salary+Pf+esi+margin)
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