Is Service Tax Required on Bonus Payments to Contract Workers? Let's Discuss!

Is "Service Tax payable on Bonus" to the contractor on Bonus payment to the Contract Workers?

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Is "Is service tax payable on bonus to the contractor on bonus payment to the contract workers?"

Certainly not. It is the reward for only those who work in the establishment. Other than employees, it will not be enjoyed.

Any bill raised by the contractor for the establishment will include service tax. There is no abatement.

Dear,

Whatever payment you are making to the contractor, service tax has to be paid. Once you are making a payment of bonus to the contractor, then you have to pay service tax.

Thank you.
J. S. Malik

If the bonus is paid to the contractor and the contractor does not charge any service charge but instead takes it as reimbursement only, then is it required to include service tax? The contractor acts as a true agent, and therefore, service tax may not be applicable. Please advise.

Regards,
Shany

If the contractor has not provided a separate invoice with service tax, it implies that he will actually receive ₹89, and the remaining ₹11 is approximately the service tax component for every ₹100 that you pay out. TDS will be separate.