Ad-Free CAclubindia and Daily Updates on your mobile. Subscribe Now!

Reverse charge on manpower supply

Pawan Kumar (Practising CA) (93 Points)

03 December 2013

Dear All, a company get outsourced labour which work in his factory, and contracotr raise bill for labour charges+PF+ES+Service Charges. Now as company is covered under reverse charge, it want to pay service tax only portion of service tax and want to take seperate bill for labour charges including PF & ESI. The company will book this bill directly under the accouting head 'Salaries. can company do so?

Reply
Follow
Share

2 Replies

CA Deepak Agarwal (0) (54 Points)
Replied 04 December 2013

Dear Brother,

Here the contractor raises the bill of Labour Charges + PF.....etc. The company cannot book expenses under head SALARIES. This will be treated as jobwork expense and thus fall under head Manpower supply Service (partial reverse charge of 75% is applicable )

thanks

Upgrade to CAclubindia Pro. Subscribe Now!

VIKASH KUMAR JAIN (Audit Executive) (711 Points)
Replied 05 December 2013

Same expense can be booked under labour charges as direct expense.Further since it is falling under Manpower supply service, so Service Tax needs to be paid on 75% value of service under RCM.