A manufacturer of asbestos sheets has entered into an agreement with it's buyer to fix the sheets with nuts and bolts on civil structures located within the buyer's premises and charging separately for the same. The departmental audit has raised objection that the service so provided by manufacturer comes under the ambit of " Commercial or Industrial Construction Service" and has demanded duty for the same. Whether the views expressed by the Department is correct?,
Yes, it falls under Industrial & commercial construction service. The manufacturer can claim the benefit of notification no.12/2003-ST or pay on the gross amount charged for fixing the sheets and take CENVAT credit. It is advised strongly that the manufacturer should enter a separate agreement for affixing the sheets and no time this should not be combined with supply agreement.
| Originally posted by :SIDDHARTHA SANKAR ROY | ||
| " | A manufacturer of asbestos sheets has entered into an agreement with it's buyer to fix the sheets with nuts and bolts on civil structures located within the buyer's premises and charging separately for the same. The departmental audit has raised objection that the service so provided by manufacturer comes under the ambit of " Commercial or Industrial Construction Service" and has demanded duty for the same. Whether the views expressed by the Department is correct?, | " |
It is presumed that the second contract is only for labour and no materials are involved. If so it could be under commercial construction. The small service provider exemption would be available to the service provider in terms of not.6/2005.
T R SOOD & CO
New Delhi
CA Inter
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Vardhaman Group of India
Pimpri Chinchwad
CA Inter
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CAclubindia
