As we all know that from 1.7.12, service tax is required to be deposited on manpower supply service under reverse charge mechanism. Thus it is important that after considering all the 4 aspects, decision is taken whether the service is in the nature of manpower supply service or not:
a. Contract of the service.
b. Nature of service received.
c. The extent of superintendence or control of the recipient over the labour supplied. As long as such manpower is not placed operationally under the superintendence or control of the recipient, it shall not be a case of manpower supply.
d. Description of service shown on the invoice.
Therefore generally the off roll employees, contract labours, security services, hiring of manpower for gardening, house keeping, cross charging of salary cost of employee from other group companies etc shall be treated as supply of man power and reverse charge shall be applicable. However, where ever the contract is for pure supply of services like technical fee etc a position could be taken that the same would be out of the perview of man power supply.
Further it is also advisable that if we are entitled for cenvat and if there is any doubt on applicability of “man power supply” we should pay service tax and take cenvat.
For detail analysis, kindly send us the copy of bill/agreements in case of any doubt on applicability of the provisions.