Whether service tax applicable on civil labor contract works?

We are deploying labor contractor for building constructions activities like Fabrication, Trimix & Flooring Work (On Item Rate Basis) & all material is in client scope.
Pl suggest whether service tax will be applicable or not on the same? As client is denying to pay the same.

2 Replies to “Whether service tax applicable on civil labor contract works?”

  1. Yes it is applicable as you are selling service. It is applicable on the commission ( not on the wages of labors).

    while claiming to your principal you need to raise the invoice in duplicate.( one for service tax deptt.)

    If principal is not paying , you need to deposit from your income else later 100% penalty will be imposed.(10.3%). consult with your CA.

  2. If your contract is to supply only manpower, then it is covered under service tax under manpower supply:-
    [(68) “manpower recruitment or supply agency” means any person engaged in providing any service, directly or indirectly, in any manner for recruitment or supply of manpower, temporarily or otherwise, to any other person;]
    If your contract is for construction activity, then also it is covered under civil construction service.

    Once your total billing for the year for all the clients exceeds Rs 10 lacs, then you are liable to pay service tax. If you are raising proper bills showing all the details required such as your service tax regn number, value of service and service tax etc as per the provisions, client cannot deny payment.

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