Different between Subcontract and Purchase Service.

[Former Member]

Hi all

I want to know about difference between Subcontract and Purchase Service.

My company implementation a Construction Project and a Production Company.

In Construction Project:

My company will be supplied main-material, Vendor supply labor and sub-material.

Contract between my company and Vendor is payment when complete.

In Production Company:

My company will be supplied main-material, Vendor procedure finish goods. My company will receipt finish goods.

I don't know which is Purchase Service, which is Subcontract.

Regards,

[Former Member]

dear friend,

if i m not wrong

services: means the jobwork for which vendor comes to our premises and provides us the service. eg. house keeping, security services

subcontracting: means the process in which we send some or all parts to the vendor outside our premices and he does value addition either adding some more parts or without adding any and then retuns back to us.

[Former Member]

Sub contracting:

suppose we are manufacturing one product or an assembly of some parts.

In this proceess we will give some work out side the organisation called sub contactor.

we will send him some components may be raw materials or semifinished products.

he will work on and make the the product and return to us, we will pay him making charges only.

Service:

suppose :cleaning of a machine. In this scnario the vendor cleans the every part and returns to us.

Here he is not going to make any product or part of a product.

we will pay service chareges

[Former Member]

Hi,

Your Construction Project is Service and your Production Project is Subcontracting.

Service - Company asks for labour to finish the work and pays them once the work is over.

Subcontract - Company sends raw materials and packing materials to subcontract vendor and they will make that as a finished product and they will send back to us as a finished good.

Hope it helps you.

Regards,

Prasath

[Former Member]

First one is combiantion of service and subcontracting

second one is purely subcontracting.

regards,

sujit

[Former Member]

Dear SNB

Thank for your answer.

My question is in your first one. How to separate Subcontract and Purchase Service.

Regards,