Composition scheme

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Sukanta Mall (Querist)
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19 January 2012 The scope of a turn key contract was (i) supply of equipments and (ii) erection and commissioning. The nature of work is construction of electrical grid substation. Two separate contract is executed with the contractor for supply and commissioning. Whether, composite scheme can be availed for payment of service tax?

Arun Gulati

Arun Gulati (Expert)
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22 January 2012 I think you are liable to pay service tax under Erection,commissioning or installation services but if you are paying vat on said goods, then you can avail composite scheme. However, as per rule 3 of composition scheme gross value includes vale of plants and equipment in that it will dangerous for you to avail benefit of composite scheme, you have add value of plant and equipment. Better to pay tax under 'ECS' on labour part without availing abatement.

Sukanta Mall

Sukanta Mall (Querist)
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22 January 2012 Tnx Arun for ur valuable suggestions. Again I want to mention that under Erection contract, the scope of work also contains procurement of certain materials like nuts, bolts, fasteners, etc. So if ECS is considered as the only signle contract, is it possible to avail composite scheme thereby on the material supply portion no ST would be paid. What will be ur suggestion pls.

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