Differences between Manpower supply Service and Manpower Recruitment Service

Differences between Manpower supply Service and Manpower Recruitment Service

Initially both the services were defined under section 65(105)(k).But with the introduction of Finance Act 2012 the  provisions of  defining section 65 were made inapplicable w.e.f 01/07/2012.

Lets discuss the current definition of both the important services with the help of a Comparative chart.

Sr No	Particular	Manpower Supply Service	Manpower Recruitment Service
01.	Why the service is Taxable	It is not covered under Negative List .(Section 66D)	It is not covered under Negative List .(Section 66D)
02	What does the service mean	The Manpower Supply service is understood to mean when -one person (i.e the service provider) provides to another person(i.e the service receiver) -with one USE of one or more individuals(i.e the manpower) -who are contractually EMPLOYED or ENGAGED by the service provider. Also as per Rule 2(g) of Service Tax Rules “supply of manpower” means supply of manpower,temporarily or otherwise ,to another person to work under his SUPERINTENDENCE  or CONTROL.	The manpower recruitment is defined as  any service provided to a client(i.e the service receiver) by a manpower Recruitment Agency in RELATION to the RECRUITMENT of candidates(i.e the manpower) in any manner.
03	From where the above interpretations are drawn	Circular No. 354/127/2012 dated 27.07.2012	Clarification of Trade Notice No. 53 CE (ST) 97/ dt  .4.07.1997 issued by Central Excise Commissioner ,New Delhi.
04.	Main difference	Employer-employee relationship exist between the service provider and the individual(manpower). And not between the Service Receiver and the individual(manpower)	No such relationship exist between the service provider and the candidates.The candidate becomes the employee of Service receiver ,if he is selected.
05.	Applicability of Reverse Charge	Applicable if the Service provider is an Individual,HUF,AOP or firm and the Service Receiver is a Body Corporate.Then Partial Reverse Charge in the ratio 25:75 (SP:SR)	Reverse charge is not applicable.Whole service tax is paid by Service Provider.
06.	Examples	-Services of providing employees of agency to business As per CBEC circular no. 96/7/2007-ST dated 23-8-2007 -Deputing officers from one company to other Reference:As per CBEC circular no. 137/35/2011-ST dated 13-7-2011 -Supply of manpower on man-hours basis Reference :Future focus infotech v. CST (2010) 25 STT 373 (CESTAT),	-Services of shorlisting the candidates -services of providing database of suitable candidates