Reverse charge mechanism

$ achin @grawal (ahmedabad) (39 Points)

22 September 2013  
sir, in all textile factories, services of a labour contractor is availed for operating machines and for production purposes. In such cases, a group of person are employed on that machinery along with the principal labour contractor who works with them. Company also deducts esic, pf, of all the persons so employed and also deposits their part of employer contribution in regards to the same. Now my question is whether it shall be considered manpower supply service and reverse charge shall be applicable? here the contractor is also working with his labour. if reverse charge is applicable then it would amount to huge liabilities for any textile company as their major part of production expense consists of such labour bills. pls have a healthy discussion on the issue.