Saudagar K (accounts) (64 Points)
21 April 2016Dear SIr,
i recived invoice on Rs.155000/- ( type of work : Lobor charges for cutting Pipeline flushing work done) and vendor submitt the decleration letter for "NIL Services Tax" bcaz annual turnover is approx 4Lac.
now i wnt to know RCM is applicable, if yes to who will pay RCM,
compnay pay RCM from out pocket or compny will deduct RCM from vendors payment and pay to RCM liability.
Thanks in Advance !!!
CA Narender Lamba
(ACA)
(109 Points)
Replied 21 April 2016
purshotam vohra
(CA IPCC)
(138 Points)
Replied 21 April 2016
Saroj Rout
(CA FINAL)
(120 Points)
Replied 21 April 2016
Before examining the RCM applicabilty first make sure that , the service received by the company by way of "labour supply for cutting Pipeline flushing work " Since the work is specified and it is being done by the labour force, it will not be covered under Manpower service . A service will be get covered under manpower service only when the provider of service has supplied manpower and the supervision and control is lies with the Service receiver.
If it is manpower service , service receiver need to pay service tax under RCM even though the service receiver is a small service provider .
Saudagar K
(accounts)
(64 Points)
Replied 21 April 2016
this is not a manpower service, its pure labor charge work .
Swamy
(Article)
(116 Points)
Replied 22 April 2016
So it may come under works contract RCM liability will be 50%
Swamy
(Article)
(116 Points)
Replied 22 April 2016
So it may come under works contract RCM liability will be 50%
purshotam vohra
(CA IPCC)
(138 Points)
Replied 22 April 2016
Saudagar K
(accounts)
(64 Points)
Replied 22 April 2016
Dear Purshotam Sir,
have any notification for same ??
Saroj Rout
(CA FINAL)
(120 Points)
Replied 22 April 2016
Pl refer Rule 2 (g) of Service tax Rule 1994 inserted wef 01.07.2012 vide notification no 36/2012 ST
purshotam vohra
(CA IPCC)
(138 Points)
Replied 23 April 2016
ANIL GOEL
(Finance Professional)
(27 Points)
Replied 23 April 2016
RCM not applicable.Mr. Sanjay Rout and Mr. Purshotam Vohra explained the matter very well.
Saroj Rout
(CA FINAL)
(120 Points)
Replied 23 April 2016
Mr. Anil Goel, from the very beginning i am saying ,No RCM will be applicable for the service “Labor charges for cutting Pipeline flushing work”
RCM will not be applicable because the said service is not covered under manpower supply service. Why the service will not be a manpower supply service that thing only I have pointed out by referring Rule 2 (g) of service tax rule vide notification no 36/2012.
There will be no question of covering the service under works contract service not because there is no provision of material as well as with service. This need be studied with definition of works contract as “works contract” means a contract wherein transfer of property in goods involved in the execution of such contract is leviable to tax as sale of goods and such contract is for the purpose of carrying out construction, erection, commissioning, installation, completion, fitting out, repair, maintenance, renovation.
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