service tax on manpower supply service - security serviceBudget 2015 brings lots of changes in service tax. Service tax on manpower supply service and security services is covered under full reverse charge now. For better under standing, read detailed article.

 

Service tax on manpower supply service – Definition:

Manpower supply means supply of manpower , temporarily or otherwise, to another person to work under his ( service receiver-employer) superintendence or control.(Rule 2(g) of service tax rules)

Reference : cbec notification read here.

 Service tax rate for manpower supply service:

Service tax rate for manpower supply service is 12.36% until 1st June, 2015.

New rate 14% will be applicable from 1st June, 2015.

 

Full reverse charge after budget 2015:

If service provider is Individual, HUF, proprietary firm, partnership firm or AOP located in taxable territory and service receiver is a business entity incorporate as body corporate located in taxable territory; Reverse charge mechanism will apply.

If service receiver is located in non taxable territory or charity or non profit organization, government;reverse charge mechanism will not apply.

Under reverse charge, service receiver is liable to pay service tax on 100% of the value and service provider is not liable to charge or pay service tax to government. ( Changes in budget 2015) . Service tax on manpower supply is covered under full reverse charge mechanism. Read the post- link

 

In other cases, service provider is liable to pay service tax on 100% value.

Full budget pdf is available at this link.

 

We can understand it from following table:

 

Service tax on manpower supply and security service

Service provider Service receiver Service tax charged and payable by service provider Service tax payable by service receiver under RCM
Individual Individual 14.00% 0%
Individual HUF 14.00% 0%
Partnership firm Body corporate 0% 14.00%
Partnership firm Individual 14.00% 0%
Body corporate Body Corporate 14.00% 0%
individual Body corporate 0% 14.00%
Individual Partnership firm 14.00% 0%
Body corporate Individual 14.00% 0%

 

Note : 14% rate is effective from 1st June, 2015.

SCOPE

When individuals are contractually employed by the manpower agency and the agency supply their services to other organization. Employer employee relationship is existed between manpower agency and the individual. Manpower agency is supplying manpower services to other organization. So here service tax liability will be arisen.

When one company transfer its employees to other company for some period. The salary is debited to other company. This is also example of manpower supply service.

Services provided in addition to employment for a consideration would be service. When employee provides services to an associate company on contract basis, it would be treated as provision of service.

 

CONTRACT LABOUR

Contractor means a person who undertakes to produce a given result for the establishment trough contract labour or who only supplies labour for any work of establishment.

Manpower supply service by contractor

When contractor supplies labours for work, it will be considered as manpower supply service. But if contractor hires labours for work of establishment and labours work under supervision of contractors and principal employer has no control on labours then it is not manpower supply service. So when contract is for some work and not for supply of manpower, there is no manpower supply service liability.

Example:

Mr. Prajapati supplies 3 employees to T & J Ltd. where employees are required to work under supervision of T & J Ltd. In this case, it is manpower supply service.

However, If there is no supervision and control on work of employees by T & J and employees are working under instruction of Mr. Prajapati, it is not manpower supply service and can be considered as other service.

So here control and supervision of service receiver or recruitment is necessary to establish service as manpower supply service.

When employees are hired directly by employer and employer does not avail service of manpower recruitment agency or contractor, there is no manpower supply service.

Value of taxable service:

In taxable value, Following are to be included:

salary, PF, ESI and commission of labour contractor

 

Case laws:

1.       The appellant had supplied skilled persons to TCS and Infosys to work on software projects. Payments were made to assessee on basis of man hour basis. Number of personnel to be employed was prescribed in the agreement. It was held that it was manpower service and is taxable.  Future Focus Infotech v CST.

2.       When contractor gets payment for loading and unloading of cement bags and hires labours for it and also get payment according to fixed rate of different type of work, It is not manpower supply service. K Damodarareddy v CCE.

 Charging on man-day or man-month basis does not make service man power service. Future Focus Infotech v CCEValuationAssessee should include total billed amount (salary of employee plus profit)under valuation for service tax.

 

I hope you will calculate right service tax on manpower supply and pay to government after budget 2015 changes.Still if you have questions, ask through comments. If this post becomes helpful to you, Share this post through buttons on left site

 

185 thoughts on “Service tax on manpower supply service ( security service)

  1. Service tax on manpower supply and security service
    1. What will be the tax treatement when both the service provider and the service receiver are a Partnership firm
    2. When it is said as 0% then Is it correct that the service provider while billing need not include service tax in his bill instead the service receiver based on the labour payment make service tax payment directly to the service tax deparment @ 12.36% Kindly confirm

    1. No reverse charge will be applicable here. service provider has to charge service tax at 12.36% on bill if his service turnover of previous year or current year is more than Rs. 10 lakhs.

  2. We run a Placement consultancy. Ours is a partnership firm and all our clients are big FMCG Companies. Just want to know whether we are also covered under Reverse Charge Mechanism. Is so, then as per Budget 2015 , we should not levy service tax in our invoices as it is duty of service receiver to pay ST. Please clarify.
    Thanks
    Neetu

    1. No, there is no reverse charge mechanism for placement services. For manpower supply service, you should have full control over manpower supplied and they are required to work under your control. This is not in your case. You are required to charge service tax at 12.36%.

  3. WE HAVE REGESTRED SOCITY WICH HAVE PROVIDE MENPOWER TO GOVERNMENT DEPPARTMENTS WE HAVE ALSO PLACEMENT RAGSTRATION WHAT WILL BE OUR LIBILTY AS SERVICE TEX IN 2015-2016

    1. Yes, service tax will be applicable when you are providing services to government. Service tax liablity will be accrued when your turnover of services increases Rs. 10 lakhs per annum.

      Read my post for further clarification.

      https://taxmasala.in/small-service-provider-exemption/

      Also remember that manpower supply and placement services are different and reverse charge mechanism will be applicable to manpower supply service. But not on placement services.

      1. Dear Madam,
        My friend start a manpower supply business from FY 2015-2016
        Monthly around 1,30,000/- bill raised to Local authority and Goverment office without service tax charged this method of bill correct or not please provide any exemption or RCM to these type of services

        Please mail me details this mail id manjunatha.k1987@gmail.com

  4. Our firm is a proprietorship firm. We do manpower supply on contract basis to the companies. Till last month we were charging 25% of service tax on our bills, i.e 3.09% out of 12.36%. We came to know that from april-15 onwards; we need not to charge any amount of service tax on our bill, the whole amount of service tax i.e 12.36% will be paid directly by the principle employer to the government. Please clearify us. Thanks in advance.

    1. Yes, service tax is covered under full reverse charge for manpower supply service. You do not need to charge in bill when providing service to company.

  5. Kindly clarify the service tax is 14% mentioned with effect from (date) present we are charging 12.36% only

  6. Hello R/ Mdm,
    we are Partnership Firm and receiveing the Security Service from Firm, and in Apr-15 bill he is not charging service tax, whether our firm is liable to pay service tax, pl. guide

    1. If he has exhausted Rs. 10 lakhs service during the previous year, he will charge service tax. otherwise not. Read my post https://taxmasala.in/small-service-provider-exemption/

      If he is liable to charge service tax, there is no reverse charge mechanism will be applicable when partnership firm is receiving security service. He will charge service tax at full rate at 12.36%. If he is not charging, you are not liable to pay service tax.

      1. Hi Admin,

        Let say there is a man power service provider & he is providing man power to a proprietorship company then who should pay the tax here?

      2. No RCM is applicable if individual is providing service to proprietorship firm. However, service tax should be charged on bill and paid to government by service provider.

        Also take care about small service provider exemption.

  7. Hi Admin.
    Thanks for the article. It is very informative.

    I have 1 query. Is reverse charge applicable if a partnership firm provides manpower RECRUITMENT service to a company.

    Under recruitment service, a profile of a candidate is sourced & if he / she is selected, then the candidate will be placed at a company on permanent roles. Here the service provider (a partnership firm) will not have any control over the candidate placed & the payment of salary to the candidate will be taken care by the Company itself.

    Please confirm the service tax rate to be charged by partnership firm while raising invoice to company towards recruitment fee.

    1. As per details given by you, the service is placement consultancy. So the rate of service tax is 12.36% with no reverse charge mechanism. The partnership firm is required to charge 12.36% ( 14% from 1st june, 2015) in bill and you are required to pay it.

  8. We have received one bill from HR Consultancy and they only provide the manpower but the same manpower will be working under our company and there is no employer and employee relation with the HR Consultancy…so pls clarify whether this will come under Placement service or Manpower supply service.If it comes under Placement service,what will be the service receiver’s liability?

    1. If your company hires the employees through any placement consultancy and salary etc are paid directly from your company with no control on employees’s work by HR consultancy firm, it is not manpower supply but placement service.

      1. manpower suppler charged service tax on wages + their service charges.In my opinion it should be calculated on the part of their service charges only. Pls clarify Am I correct?

      2. No, it can’t be. It can be calculated on whole value as per notification issued by department.

  9. Hi madam,
    Here “manpower” means a continuous supply basis or a one time supply basis? Also should the service provider state in the bill that Serv Tax will be borne by the receiver?

    1. Manpower supply includes hourly or temporary basis or continuous supply of manpower.

      It is not necessary to state in the bill about reverse charge.

      Still, small note can be added about RCM applicable.

  10. Madam,

    Ours is a security agency providing security services to other companies. Our concern is registered under AOP. We were billing/paying service tax as applicable till now. Since the manpower service & security services are covered under full reverse charge now, as a service provider can we discontinue billing/paying Service Tax with effect from 01 Jun 2015?

    1. You are not required to mention in bill for service tax. charge only basic amount without service tax. But remember that fully reverse charge is applicable when you are providing service to company – corporate. When you provide service to other than company, service tax should be charged on bill.

  11. Hi

    I have started a placement consultancy as a proprietor last year in October 2014. I basically assist the companies in hiring employees who work on the company’s payroll. I just help them in hiring suitable candidates.

    1. My income from the service provided has not crossed 10 lakhs in last FY 2014 – 2015 and it will not touch 10 lakh this year too.

    2. Am I still suppose to charge Service Tax @ 14% to the company while raising the invoice.

    Request you to please advise on the above

    Regards Anirudh

  12. Hi

    We are having contarctor on piece rate basis and in the month end the are raising bills on the basis of No. of pieces. Reverse charge mechnisism is applucavble on this or not.

    Thanks and Regards
    Dhruv

    1. RCM will be applicable when service receiver is company and provider is individual.

      No matter the rate is on piece basis, RCM will be applicable.

  13. We have a construction company under a partnership of two, where we don’t operate under service tax system. If we want to have a business where we supply manpower and operate according to sevice tax system , is it possible to create a different company solely for this business under the same partnership, without dissolving our construction company?Kindly help.

    1. You can create different company but as members are same,Service tax department will raise the question because overall it is to conceal the turnover.

      1. Service Tax has been charged on basic salary and same has been paid through online. But it is learnt that the service tax should b charged on gross. Please clarify my question and suggest me solution.

  14. we have a Pvt Ltd Company and receive security services as well as manpower services from a firm, under this situation kindly advice who will be responsible to pay service tax payment and on which rate.

    1. Your company is liable to pay service tax at 14% ( From 1st June 2015) and 12.36% up to 31st May, 2015. The service is covered under full reverse charge .( APPLICABLE FROM 1st April, 2015).

  15. MAM OUR COMPANY HAVE TO GIVE CONTRACT OF BUILDING CONSTRUCTION TO A CONTRACTOR AND MATERIAL WILL PROVIDE BY OUR COMPANY. .MEANS CONTRACTOR WILL GIVE THEIR BILL ONLY LABOUR CHARGES. IN THIS CASE UNDER WHICH SERVICE IT WILL COME. MEANS TO SAY THAT UNDER MANPOWER SUPPLY THEN WE WILL DEPOSIT SERVICE TAX 14% ON VALUE.AND Value of service excluding material
    THEN IN THIS CASE SP. AND SR WIL DEPOSIT 50% ST PLZ REPLY MAM

    1. Your service cannot be considered as manpower supply because it is specifically work contract for construction. When two definition of services are applicable, consider more specific one as per service tax rule. Consider it construction service and yes, 50% reverse charge will be applicable in your case.

  16. Hi Maam,
    I have a proprietorship firm and I am providing CNC Machine Operator (Manpower) in different Steel Industries against monthly Job Contract. From Apr, 15 the service has been started. But I have not generated any bill as I had no Service Tax No. Now on 05.06.2015 I have got my Service tax No.
    So, Can I generate bills by the current date for Apr and May with the service tax? Or have to make it without tax?
    And what is the percentage tax against service receiver and provider for those months and current month? Please help.
    Thanks & regards,

    1. If your turnover of service provided is less than Rs. 10 Lakhs for previous year, You can avail small service provider exemption up to turnover of 10 Lakhs.. Read about it from this link.https://taxmasala.in/small-service-provider-exemption/

      If turnover for this year is more than 10 Lakhs, charge service tax at the rate of 14% for turnover exceeding Rs. 10 lakhs.( according to point of taxation as bills and payment both are after 1st june, 2015. https://taxmasala.in/point-of-taxation-rules-2011/.)

      If you have provided service tax to company ( Corporate), no need to charge service tax at bill because of 100% reverse charge mechanism.

      https://taxmasala.in/reverse-charge-mechanism/

      https://taxmasala.in/union-budget-2015-16-highlights-service-tax/

  17. if pvt ltd company receiving service from manpower consultancy, labour contractor and security agencies,they should pay 100% service tax amount to department under reverse charge mechanism and i just want to know service tax amount will be paid through pvt ltd company service tax registration?, otherwise is there any registration required for that ? pls advice me

    1. Yes, through company service tax registration. Separate registeration is not required to pay service tax under reverse charge.

  18. Thanks for replying me and i need to know while making online payment for service tax RCM, what service tax code will be choose,if we (Pvt ltd company) under works contract (code 00440410),what code will be select either works contract code or manpower supply service tax code. pls advise me.

  19. In the case of RCM, the bill is raised before 1st June, 2015. The Rate for RCM shall be the old rates. Please confirm.

  20. mam if a limited company receiving a service of marble polishing & labour from an individual so i want to know about the class of service whether it is a manpower service or works contract service???

  21. i am individual providing manpower services to government hospital ( manpower such as wardboy or ward aya). I want to know that whether any exemption is available as such receiver is a government hospital & whether any amendments in budget 2015 regarding cleaning activity service.
    Please mam reply asap..

    1. No, there is no exemption for service provided to government hospital or abatement for cleaning service.

      You are required to charge service tax in bill.

  22. Mam We are providing Man Power Services Through Tenders to Government Organisation for Cleaning or other Works ? Whether Service Tax is Payable as we are providing Services to Government & who will be Service Tax & at What Rate ? Pls Clarify

    1. If service receiver is body corporate, service tax is required to pay by service receiver under reverse charge

      otherwise

      service provider should charge tax in bill and pay to government.

      Assuming you are individual or partnership or proprietor.

  23. Madam,

    My firm is a Partnership concern and we provide manpower services to Lok Nayak Hospital (hospital run by Delhi government). Could you pls. clarify if we are required to charge service tax as part of our billing to the hospital OR will it be the recipient (in this case the hospital) which will be required to deposit the service tax (under reverse charge mechanism).

    1. If lok nayak hospital is body corporate, it will pay service tax under RCM and no need to charge service tax in bill.

  24. hallo madam i am running a security and house keeping services ( proprietor ship)and my turnover is above 10 lakh in 14/15 fy, most of my clients are apartment association,educational institutions, so pls tell me how to rise bill should i collect ST from my client or mention RCM applicable in bill and submit pls guide us ,thamks in advanced

    1. If you are supplying bill to companies for manpower supply, RCM will be applicable and no need to charge service tax. But if you provider service to other persons ( Other than company), you are required to charge service tax in bill at 14%.I have presented table for it. Please go through it.

  25. Madam,
    Thanks for giving reply for my query dated 29 May 2015. Our Security agency is registered as AOP. We are providing security services to private ltd company, partnership firm and proprietorship firms. In this case, where all full RCM is applicable? Whether I should bill & pay14% Service Tax in respect of proprietorship firm ?

    With Regards

    KP Nair

    1. If you provide service to company, no need to charge service tax in bill. for other service receiver, charge service tax in bill at 14%.

      1. Madam,
        if I am entered into an agreement with pure labour services for infrastructure work what will be the rate of service tax applicable whether under RCM or under normal rate i.e 14% . and if i had written in agreement to charge the respective rate of service tax to me `

      2. If you are supplying manpower to corporate, RCM will be applicable. You are not required to charge service tax in bill and service receiver will pay the service tax itself. Just communicate with the party.

  26. Ours is a Vehicles Research & Developemtn Establishment under Ministry of Defence, Govt. of Inida. We do conclude contracts for hiring manpower. Kindly claify Whether 14% service tax is payable on entire bill amount of the Contractor which includes wages, vda, pf and service charges(profit)?
    Thanking you,

    1. Yes, on entire amount charged by contractor to party. Consider reverse charge mechanism point while charging to party. go through the article.

  27. Being a partnership concern in chennai providing Man power supply and security services, we have clients like individuals, partnership firm private Limited company and Limited company, Society, Trust and association. In this connection we like to know what is our rate of service tax liable to charge and remit to the department in each clientswise as above ? We look forward your advise in this matter early;

    1. I have provided chart on this point. Still I am mentioning here.

      If you are providing service to corporate , reverse charge mechanism will apply and whole service tax will be payable by company under RCM. NO need to charge service tax in bill.

      If you are providing service to person other than body corporate, charge 14% service tax in bill and pay to central government.

      Please go through this post also to know small service provider exemption.

      https://taxmasala.in/small-service-provider-exemption/

  28. Good Eve.
    Ours is a Partnership firm providing manpower supply service.As of 01/04/2015 it is full reverse charge, tats understood.My query is whether the service provider has to get himself registered as he is not liable to pay any service tax?(service provider’s turnover exceeds 10 lakhs)

  29. Mam we are a Private Limited company taking security services from a Partnership firm and I know that we are liable to pay service tax under RCM, my query is whether we have to get registered as service recipient of manpower recruitment / supply agency service although we are already registered as service provider under the above mentioned service by mistakenly. And the second question is for the month of June, 2015 service provider i.e. partnership firm has raised the bill on us by charging service tax @ 14% can they do so please clarify.

    1. Make amendment in service tax registration certificate.

      The partnership firm is right in charging rate @14% from 1st june, 2015.

  30. We are paying two things to manpower agency (Rembursement of salary for the employees provided and Service charge of 10% for there service of providing the manpoer….On what value service tax will be applicable (on full value of invoice or only on service portion)

    1. Full value should be considered as taxable value. Means employee salary plus service charge 10%. as per per clarification by department via M.F.Dr. letter F.No. B 1/6/2005-TRU dated 27.07.2005

  31. I am part of a co-operative housing society availing security services. Should our service provider charge service tax in the invoice?

  32. we recruited on employee through Placement service consultancy and they have charged the service tax 14% in their bill and they mentioned the service category is: Man power recruitment agency. It is come under RCM or not?

  33. We are a Private limited Company… I would like to know if security guards are provided by proprietor and he charges as per their shifts and adds service charges. He charges service tax pre 31/03/2015. I would like to know whether this service is taxable as manpower supply service or security services under reverse charge mechanism.

    1. It is manpower supply service and covered under full reverse charge from 1st April, 2015. If proprietor is providing service to pvt ltd, full reverse charge will be applicable and he is not required to charge service tax in bill. You are required to pay service tax directly to government under RCM.

  34. we r registered in Manpower agency, we r also availing security service, but not registered in the service (security), should we also register in this service to remit to the department or can we remit in manpower.

  35. hi we are a registered apartment under societies registration act and collecting maintenance, paring charges and small advertisement income from owners of flat and outsiders. please guide us whether we are required to collect service tax on the same what is the critieria and exemptions if any

  36. mem we are a privet limited company providing menpower to limited companis. govt departments pls.cleare that can we charge and deposit service tex 14% in our bills ,

    1. You need to charge service tax in bill at 14% and pay to government department. ( in both case – while providing service to companies and government)

  37. If an individual or or HUFor partnership firm or AOP supplies manpower to a Govt. Department shall it be covered under the reverse charge mechanism. What is the status of a Govt Department. For example whether Police Department under the Ministry of Home can be regarded as Body Corporate.

    1. NO, police department is not body corporate and reverse charge mechanism will not apply. You need to charge service tax on bill. Only company registered under 1956 act should be considered as body corporate.

  38. Hi!
    We are proprietorship company (service recipients) receiving security services from a agency ( proprietorship),
    Please guide how the billing would be done and who will deposit the service tax?

  39. madem if service provider is a private limited company and service reciver is a state govt. department then who charge and deposite service tex 14% ???

  40. Respected Madam

    Please clarify We are a Partnership Firm providing Security Services .. if we provide services to partnership firm means What is our service tax liability? If we provide service to any pvt ltd companies but they are not an assessee under service tax. in that case we can collect the service tax from pvt ltd ?

    1. You cannot collect service tax from private ltd company if you are providing security service to them. ( The company needs to get registered under service tax because it is liable to pay service tax under reverse charge.)

      If you are providing service to partnership firm, you need to collect service tax in bill and pay to government.

  41. hallo madam i am running security services (proprietorship) my most of the clients are apartment owner associations in this case should i add ST on bill and submit or just mention RCM APPLICABLE ,so that let them pay ST

  42. I want to know service tax applicability on supply of labour by a partnership firm to a private limited company in detail.

    1. 100% reverse charge will be applicable in your case and pvt ltd company is required to pay 14% service tax itself. No need to charge in bill any service tax.

  43. Madam,
    We are a partnership firm and supplying labour with material to a private limited company and want to know service tax applicability on this service in details.
    Thanks

  44. In case the service recipient of a manpower supply service is a government office, does the mechanism of reverse charge apply?

  45. Respected madam,
    Can a “Supply of manpower ” Company registered as “Private Ltd” ? If such a company is registered as PVT LTD, did the company get exemption from service tax?
    otherwise which is the best catagory to register a ” Supply of Manpower ” company ???

    1. If PVT ltd company is receiving service from individual, HUF, the company needs to pay service tax under RCM.

      If pvt ltd company is providing manpower supply service, it still can get exemption up to First 10 lakh taxable turnover of service. Small service provider exemption is available to pvt ltd company also.

      Read my post -https://taxmasala.in/small-service-provider-exemption/

  46. I am proprietor of firm
    I am provide housekeeping service at institute of hotel management ministry of tourism. What we raise the service tax on bill or not

  47. Mam, we have a proprietorship company providing manpower services to renowned banks and companies.As per current service tax law, we are not charging any service tax to our biils to clients. In that scenario what is our liabiliy to service tax and how can we filed the returns. Seeking advice from you.

  48. Dear Madam,

    I am a Security Service provider and provide security to registered housing cooperative, is the exemption at serial no 28 (c) in notification no 25/2012 applicable here. Should I charge Service Tax or is exempted frompaying service tax towards our service.

    Your urgent reply will be of help us to resolve a major issue of ambiguity in this notification. Please advice.

    Ronald Pinto

    1. Reverse charge will be applicable only if service provider is individual, huf and service receiver is corporate. Check status of society, whether it is company or not.

      If it is not company, you need to charge service tax in bill.

  49. BY HIMMAT SINGH
    RESPECTED MADAM
    I HAVE A PROPRIETORSHIP SECURITY SERVICES AGENCY. I WANT KNOW THAT I PROVIDING OUR SERVICE WITH A CO-OP HOUSING SOCIETY PVT LTD.THAN WHAT IS THE SERVICES TAX APPLICABLE

    1. Covered under full reverse charge when service provider is proprietor and service receiver is pvt ltd. No need to charge in bill service tax.

  50. Respected mam,

    In 1st case

    what happens if I am contractor and charged Services tax on bill 3.09 % to companies.
    and not flied Services tax return ?

    In 2nd case
    Q.1 How would i know,whether company paid remaining services tax (i.e. 9.27%) or not ?

    Q.2 What is consequence occurred on contractor if not paid by company.?

    whether contractor has to pay remaining part of Services tax (i.e 9.27% )?

    Replay on my ID I.e. amitkhanka.za@gamil.com

    1. Why are you not filling return? You need to file return and paid service tax collected to government department. It is not your duty to cross check whether company has paid service tax or not.

  51. Hi mam, I am starting manpower supply firm immediately. Already i have taken ST, but when i doing marketing with companies, they asking ESI, EPF and Contract Labour (Regulation & Abolition) Registration copies. Please assist me.

  52. Hi mam, i have started manpower supply services with use of ST Registration certificate, but the recruiter the company is asking me to submit the copies of ESI, EPF and Registration under Contract Labour (Regulation & Abolition).. What should i do now. Why they ask this. Is it compulsory to take these? Already TAX department took 5000 rupees for this ST(Service Tax). Also Auditing official took 3000 Rupees. Now Again what more investments in this service related works? Please guide me

  53. When reverse charge machanism is applide , will the TDS be deducted from the service providers bill?/ if so the corporate or firm (Service Receiver) suppose to intimate the service provider with proof of tax submited on the bill raised??

  54. Ours is a manufacturing company. We have given contract to security agency. Some securities are placed near factory gate.. Some securities are there in the company guest house. In the bill ,the contractor mentions Security charge for plant – 1000, Guest house securiry – 700 Tax 14% on 1700 ie 238 Total 1938. Can I take credit of full 238 or I am not allowed to take credit of ST on Guest house securiry part?. Please help

    1. As per my understanding , security service for factory gate is allowed while security service for company guest house is not allowed as it is not used in relation to manufacture of final product.

  55. Dear Madam
    Thanks for this useful blog. Is there any Govt document which says Placent agency has to charge full service tax @14% and no RCM is applicable ?
    As we raised a bill to one Pvt Ltd company and they say show us the govt document which says RCM is not applicable to Placement agency.
    Your help will be highly appreciated.

    Regards
    Rupak

  56. madam plz tell me if service provider income is less then 10 lakh and he will not charge the service tax in this case any liability of service tax is by service receiver.

  57. We have registration under Service Tax for Man Power Recruitment & supply Services. We are paying Service Tax on Security Service Bill raised by a Partnership Firm on reverse charge basis. We are also registered under Excise Act.
    My question is Cenvat Credit for Service Tax paid on reverse charge basis and its utilization to be shown in both the Return i.e Form ST-3 and Form ER-1 please give knowledge with an example. thanks in advance.

  58. We are a private limited company and we have Service Tax Registration for Manpower Recruitment/Supply Service as service recipient. A partnership Firm provides security services and we pay service tax under RCM. We are also Excise Dealer intends to take cenvat credit on such service tax paid. My question is , in order to take cenvat credit and its utilization, service tax paid under RCM should be shown in both the Return i.e. Form ST – 3 as well as Form ER – 1. Please clarify with row reference number under both the forms.

  59. Dear Sir / Mam,

    Ours is a Public Limited Company and we receive security services from a firm. Whether we have to pay service tax if the service provider has total income less than Rs.10 lakhs?

    1. Yes, if corporate is getting service from non corporate, RCM will be applicable. Turnover of service provider should not be considered.

  60. Dear mam,

    I am having a Proprietor ship firm of security and detective services, presently I am providing security Service, my turnover is 3.5 lakh per annum.

    I have charge service tax to service receiver in the bill @ 3.09% till Oct 2014 from Nov 2015 I have didn’t charge the service tax to service receiver.

    But my service tax superintendent is asking why you are not charging service tax in the bill and not depositing to the govt, and asking me to show the govt letter on this.

    Requesting u that kindly help me in this, I am in a problem.

    1. Once you opted for charging service tax on bill ( Without opting for small service provider exemption), you cant stop charging during middle of the year. However, you should not charge when RCM is applicable. You have not cleared about service receiver status ( Corporate or non corporate). If service receiver is company, RCM will be applicable for security service. Otherwise, you need to charge service tax on bill.

      1. m providing housekeeping services to hospitals and provide services to pvt co’s , is rcm will applicable, and if it is applicable den shall i make any remark on my invoice, please guide me.

  61. Madam Good Evening,
    I have a query matter related to Service Tax applicable on Receiving of Man Power Services (Data Entry Operator) by the Government department from a Private Firm. Kindly suggest whether we are liable to pay the Tax to the Service provider or not?
    Details:
    1) State Govt. district office (Receiver of Manpower Service by Annual Contract)
    2) Pvt Firm (Service Provider of 15 Manpower as Data Entry Operator)
    3) Annual Billing Amount= Rs.14,40,000/- (includes of Remuneration, EPF, ESI, Service Charge-1Rs.) (No Tax amount claimed till date)
    4) Now the firm claiming the Service Tax of 14.5% on the Tot. Monthly bills (1,20,000/-)

  62. Hi madam,

    we have provided manpower services to PVT.LTD company & ours is a Partnership Firm, so Service tax is applicable are not( do we need to add service tax on the invoice billed).

  63. Security Service bill for the month of April’15 , bill date 15.05.15 , but bill received on 14.07.15 & accounted on 20.07.15 by service receiver. So , 12.36% or 14% S. tax will be calculated? Pls Clarify

  64. Madam,

    In case of man power agency claiming TA bill of the man power supplied duly adding some service charges to the actuals incurred.

    what will be the taxable service? i.e., entire bill (or) only service charge amount?

  65. Is Govt. body required to pay Service Tax for receiving Security Service from Pvt. Ltd. Company? Was there any change change in this regard since 01.06.2015? Please clarify.

  66. IF IN MAN POWER SERVICE WHERE BOTH I.E. RECEIVER AND PROVIDER ARE PROPRIETORSHIP FIRM WHO WILL PAY SERVICE TAX AND WHICH NOTIFICATION FILL BY SERVICE RECEIVER FOR EXEMPTION IN THEIR RETURN

  67. hi mam our is a construction co engaged in construction of Bridge and Fly-overs, if we subcontract some job i.e. Steel Binding, Concere Mixing, Earth filling etc in units Per Cub. Mtr, Per Ton, Per Cft, per Sqm, Per RM etc. then we l covers under RCM under supply of manpower or not. we have to pay service tax on subcontract amount or it is also exempted as main service is exempted.

  68. Q1 If a company supplies manpower to a society, and the persons recruited are on the payroll of that society, then what is the service tax treatment for both the entities and on what amount, if any?

    Q2 If a company supplies manpower to a society, and the persons recruited are on the payroll of that company, then what is the service tax treatment for both the entities and on what amount, if any?

  69. Our company is PVT Ltd,and entered into a agreement with proprietorship firm for security services for our factory. However, the terms and condition of the agreement is that the contractor will supervise and / or control over their employees. Our company will not retain any control or supervision of the workers engage by the contractor for the security services for the factory. In this case, Whether company is liable to pay service tax under RCM or not?

  70. Hello Mam

    Our company is export service provider, so service tax on service part is nil I want to know from you we have hired housekeeping services from individual, for which we have to pay service tax under reverse charge. Can we adjust this service tax liability with CENVAT credit on input services or we have to deposit in cash. Please also guide in which code we have to submit service tax……………………..Thanx in advance

  71. Ours is a manufacturing Co. We are service receiver for Man power, freight inward & outward, insurance etc..Our Service tax payable liability is 10lac and we have enough credit in importing material. Can we set off this 10 lac without paying ? Or we have to pay 10 Lac and take credit ? Kindly advice.

  72. Dear madam/sir, We are govt under taking estt Maharashtra EX-servicemen Coprporation limited of dept of sainik welfare & resettlement Pune. We are providing security services to Municipal Corporation Prbhani. we are charged 14.5 % service on total billing.We are paying ST to Govt authority. There is any provision for exemption Service tax to minicipal corporation. pl reply: Recovery staff Subedar Major (Retd) Jaiprakash Ingle

    1. By Sub Maj (Retd) Jaiprakash Ingle MESCO Aurangabad Posted on March 18, 2016
      Dear madam/sir, We are govt under taking estt Maharashtra EX-servicemen Coprporation limited of dept of sainik welfare & resettlement Pune. We are providing security services to Municipal Corporation Prbhani. we are charged 14.5 % service on total billing.We are paying ST to Govt authority. There is any provision for exemption Service tax to minicipal corporation. pl reply: Recovery staff Subedar Major (Retd) Jaiprakash Ingle

  73. Is reverse charge also to be accrued by service receiver on invoice received from service provider for reimbursement of insurance premium on Workmen’s Compensation policy if premium amount includes service tax? In this case, service receiver is a body corporate.

    Thanks in advance.

  74. I provide people to work in a software developing company. I have not applied for registration no. since mine is a newly formed entrepreneurship. The company gives those people the work. And the amount of salary and other expenses for them are transferred from the company to me and then I make the such payments to the them. Now my doubt is that how should I make bill? And do I need to pay service tax or the company should pay it?

  75. GOOD MORNING. MYSELF NAGARAJAN. I WANT TO GET A CLEAR IDEA OF THE FOLLOWING:
    ONE SECURITY SERVICE PROIVIDER ( COMPANY OR INDIVIDUAL) WHO RAISES A BILL FOR Rs.9732/- WHICH INCLUDES SERVICE TAX Rs.1232/-.
    MY QUESTION IS WHETHER WE SHOULD CONSIDER THE SERVICE TAX PORTION ALSO FOR CALCULATION OF SERVICE TAX PAYABLE UNDER RCM OR ONLY TAXABLE AMOUNT SHOULD BE CONSIDER. I.E., SERVICE TAX @ 14.5% SHOULD BE APPLICABLE ON THE TAXABLE VALUE OR THE TOTAL INVOICE VALUE.
    PLEASE CLEAR

  76. Is there any exemption other than SSI exemption (i.e. PF/Salary/Uniform allowance etc) to Manpower supply and Placement service.

  77. We(Pvt Ltd Co ) received manpower supply from Public Ltd Co from 2011-12 till 2015-16. They charging 100% service tax in their bill. Can we take cenvat credit of service tax.

  78. If a individual person providing manpower supply through its firm to hospital an aayurveda sansthan, it will be exempt or not

  79. Kindly clarify about Service Tax applicability on:
    1. manpower engagaed by our company directly without subcontractor to complete the some work for one or two days is applicable rcm or not??

  80. Ours is a Security agency and providing services to Educational institutions which are exempt from service tax. As the services provided to educational institutions are exempt, are we required to charge any service tax on the bills raised to Educational Institutions.

  81. A firm provided monpower supply to a body corporate. But by mistake the firm has charged service tax and collected the same from the body corporate and paid to government. I would like to know is the body corporate liable to pay service tax under RCM now. Also clarify whether the firm can take service tax input of the same.

  82. Hello Mam,

    I want to provide some driver’s to municipal corporation by my proprietorship manpower firm, please reply urgent that who will lible for service tax deposit

  83. Hello Sir /Mam

    My proprietorship Man power supplier firm providing Drivers to Municipal Corporation, there is who is responsible to pay service tax.
    Please reply ASAP.

    Thanks

  84. For Security services in the case where service provider is Pvt. Ltd. Company, and Service Receiver is registered society recognised as charitable under section 12 AA and running a Charitable Medical Centre, what will be the status of Service Tax? If it is not covered by the RCM, does it mean that there is no Service Tax implication?

    1. Sir,

      In your case, RCM will not be applicable and service is not exempt as per my view. It is taxable under forward charge.

  85. we are private security agency. we provide security to geological serve of india,they said they not RCM.the service tax is 100% by service reciever.so who is the responcible to pay service tax?????? pls tell us.

    1. RCM is applicable when individual provides service to LTD. If RCM is not applicable, service tax is required to charge in forward taxation in bill. Service tax should be collected by service provider and deposited to government.

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