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         Manpower Recruitment Agents
   
 
Q.1 What is a " Manpower Recruitment Agency "?
Ans. A "Manpower recruitment agency "is any commercial concern engaged in providing any service, directly or indirectly, in any manner for recruitment of manpower, to a client. 
Q.2 What is the Taxable Service in case of Man Power Recruitment Agency ?
Ans. The taxable service rendered by a manpower recruitment agency is any service provided to a client, by a manpower recruitment agency in relation to the recruitment of manpower in any manner. 

The coverage of the term "manpower recruitment agency" is wide and includes within its ambit, the services provided by an agency from the primary stage of building a database of manpower for different categories of personnel employment, determining manpower requirement for the client, preliminary identification, short-listing and screening of prospective candidates, providing specialists for interviewing prospective candidates, arranging for their interviews at each stage; placing advertisements for recruitment of manpower in the print or electronic media, etc. In short, Service Tax on manpower recruitment agency covers within its fold, the entire gamut of services provided by a man-power recruitment agency to a client from the initial stage of selecting/identifying man-power required for any prospective employment, till the stage of actual selection for the same. 
Q.3  What is the value of Taxable Service in relation of ManPower Recruitment Agency?
Ans. The value of taxable service in relation to service provided by a Manpower recruitment agency to a client is the gross amount charged by such agency from a client in relation to the recruitment of manpower in any manner.

However, the expenses incurred by the manpower recruitment agency on behalf of the client which are reimbursed on actual basis are not includible in the value of taxable services. The manpower recruitment agency is required to substantiate such actual expenses on the basis of documentary evidence. In case the manpower recruitment agency is billing the client on the basis of a lump sum, any deductions from the same on account of reimbursable expenses, for the purposes of determining the value of taxable service may be permitted on the basis of documentary evidence adduced by the agency.
Q.4  What is the procedure to be followed if the payment is received at different stages by the Manpower Recruitment Agency?
Ans. Normally the manpower recruitment agency receives remuneration from the client for the services rendered by it as per the stipulations in the contract/agreement. The payment from the client is received at different stages, based on the completion of work/service at each stage. The manpower recruitment agency shall be required to pay Service Tax on the payments received at each stage from the client by the 25th of the succeeding month. Subsequent modifications, if any, in the bills raised to the client at the time of final payment may be allowed after verification. 
Q.5  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.
Q.6  Whether ‘trusts’ providing the services of Manpower Recruitment Agency are liable to pay the Service Tax ?
Ans. 
 
 
Law as it stands now, does not provide any exemption to trusts from payment of Service Tax. If they are getting paid for providing the service, they are liable for payment of Service Tax on the amount, which, they have received from their client and are to be treated as any other service provider.
Q.7 Do academic institutions, recruiting their students for industrial establishments on receipt of payment, come under the category of manpower recruitment agency?
Ans.  Yes, the institutions which are performing the tasks of commercial concern assisting in Man power Recruitment, fall within the scope of the definition of term ‘Manpower Recruitment Agency’ and become liable to pay Service Tax.
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