Why Is Service Tax Applied to Labor Contractors and What Does It Include?

schn84

Dear Sir,

I am confused about service tax. Why is service tax applicable to labor contractors? If yes, why is the chargeable amount of tax gross, including P.F., E.S.I., and service charge? Please provide me with an answer.

dhanpalbabu

Dear Friends,

Service tax and TDS are both applicable on contractor wages, including PF and ESIC contributions. For further clarifications, please contact us through this site.

With regards,
Dhanpalbabu

parashartrilok

As per Section 66 of the Finance Act 1994, for service tax, it is not stated anywhere that such benefits are included in the gross amount for the calculation of service tax.

Regards,
Trilok Chand

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