|| What is a " Manpower
Recruitment Agency "?
|| 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.
|| What is the Taxable
Service in case of Man Power Recruitment Agency ?
|| 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.
|| What is the value
of Taxable Service in relation of ManPower Recruitment Agency?
|| 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
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.
|| What is the procedure
to be followed if the payment is received at different stages
by the Manpower Recruitment Agency?
|| 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.
|| Whether the labour
contractors, who supply their own labour on contract, would
be covered under the definition of Manpower recruitment Agency
|| 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.
|| Whether ‘trusts’
providing the services of Manpower Recruitment Agency are liable
to pay the Service Tax ?
| 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.
|| Do academic institutions,
recruiting their students for industrial establishments on receipt
of payment, come under the category of manpower recruitment
|| 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