11 May 2014
Service tax is not payable on materials/goods involved and transferred in executing a service. Where these materials/goods cannot be separated due to accounting methodology or for any valid reason, there Abatement is given towards these materials/goods at certain specified percentage as pre-determined in the Statue depending upon the nature of service and thereby such abated value calculated on total contract value gets deducted from gross amount thereby leaving pure service value to levy service tax.
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