Indian Service Tax
Manpower Recruitment Agency
Effective Date: 07/07/1997.
Authority: Notification No. 23/97-ST, dt. 02/07/1997 (for full text of Notification see under'Consulting Engineer').
Rate of Service Tax: 8% from 14/5/2003 (5% upto 13/5/2003). 10% from 10/9/2004 - Cess 2% of 10% = 0.2. Total ST = 10.2%.
Q.Whether the labour contractors, who supply their own labour on contract, would be covered under the definition of Manpower recruitment Agency?
Ans. No, since the labour contractors supply their own labour on contract, they do not help their client in recruitment of labour in any way. Therefore, the supply of labour on contract is not covered under the definition of Manpower recruitment Agency.
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Labour contractor - Exempted
Man Power Recruitment Agency's Service
Point No. 4.
Most of the manufacturers in the Trade are entrusting a work to a contractor to a mutually agreed amount to complete the work viz. loading of cargo, unloading of cargo, packing of finished goods etc. The contractor brings his own men on his account and completes the entrusted work by using his own labour. The labourer is no way connected to the Trade/Management and will not come in the pay roll of management. On completion of the entrusted work, the contractor receives the agreed amount from the management viz. Manufacturer/Trader.
Therefore, it is to be clarified whether the contract work taken by a contractor to a mutually agreed amount will fall under Man Power Recruitment Agency.
Reply
As per Section 65(68) of the Act, Man Power Recruitment Agency means any commercial concern engaged in providing any service, directly or indirectly, in any manner of recruitment of man power, to a client.
The DGST, Mumbai has clarified vide question and answers (2000-2001) No. 7.5 that the labour contractors, who supply their own labour on contract, would not be covered under the definition of Man Power Recruitment Agency. Since, the labour contractor supply their own labour on contract, they do not help their client in recruitment of labour in any way. Therefore, the supply of labour on contract is not covered under the definition of Man Power Recruitment Agency.
[Commissioner of Central Excise, Madurai-II, Minutes of the RAC meeting held on 29/8/2003].
sir according to this we dont come under manpower recruitment agency & hence we r not under service tax na???? please sir help me in sorting out this confusion of service tax & also let me know if there is any new amendments regarding this....and also is service tax applicable to security agency who provides contract labors to company but maintains their payroll , esi & pf & monthly payment under the firm name & not through the company name....does this attracts the service tax