Applicability of service tax on free of cost supplies (foc)
This query is : Resolved
Sumit Agarwal
(Querist)
25 March 2017
I had entered into the contracts with Subsidiaries of Coal India Limited (CIL) for Crushing of Coal by Hiring Mobile Crusher
The Coal is supplied by CIL Subsidiaries we are only crushing the coal for which land is provided by Service Receiptent, water & electricity is also supplied free of cost which is already mentioned in NIT & work order, we are getting income in per metric ton of crushed coal & we are receiving the service tax only on Qnty of Crushed coal @ 15%
Now my Question is Free Supplies of Water and Electricity is to be included in service tax or not please clarify the matter
The Coal is supplied by CIL Subsidiaries we are only crushing the coal for which land is provided by Service Receiptent, water & electricity is also supplied free of cost which is already mentioned in NIT & work order, we are getting income in per metric ton of crushed coal & we are receiving the service tax only on Qnty of Crushed coal @ 15%
Now my Question is Free Supplies of Water and Electricity is to be included in service tax or not please clarify the matter
CA R SEETHARAMAN
(Expert)
25 March 2017
As no abatement is claimed treating it as works contract, such free supply need not be included.
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