We are planning to outsource our payroll process to external agent.
As per the terms of the service the agent calculates the total salaries payable for the month and sends a statement for the salaries amount. Then he raises and service invoice for his charges. We pay both the amounts to the agent and then the agent actually disburses the salaries to the employees.
Please advise on the valuation of service,whether service tax is payable by the agent only on the service charge amount or on both service charge and salaries paid through him.
CAclubindia
