Construction Industry

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This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

30 August 2010 Construction industry is covered under service tax under four main heads, i.e. Commercial & Industrial construction service, Construction of residential complex, Erection, and Works contract service.
The works contract service is brought in w.e.f. 01/06/07. After introduction thereof, is any option available with the assessee covered by these services, to chose between the first three services as referred above & works contract service.
Putting othre way round is it compulsory to collect service tax under the head of Works contract service?

CMA Ramesh Krishnan

CMA Ramesh Krishnan (Expert)

30 August 2010 Works Contract Service Vs Erection, Commissioning and Installation service

If the Specified contract is “works contract” on which VAT/Sales tax is payable the service will be taxable under Works contract Service (Section 65(105)(zzzza)
If the Contract is a simple service contract i.e. no material is involved or even if some material is involved, VAT/Sales tax is not payable the service go under Erection, Commissioning, Installation Service (Section 65(105)(zzd)

Works Contract Service Vs Commercial or Industrial Construction Service

If the Specified contract is “works contract” on which VAT/Sales tax is payable the service will be taxable under Works contract Service (Section 65(105)(zzzza)
If the Contract is a simple service contract i.e. no material is involved or even if some material is involved, VAT/Sales tax is not payable the service go under Commercial or Industrial Construction Service (Section 65(105)(zzq)

Works Contract Service Vs Construction of Complex service

If the Specified contract is “works contract” on which VAT/Sales tax is payable the service will be taxable under Works contract Service (Section 65(105)(zzzza)
If the Contract is a simple service contract i.e. no material is involved or even if some material is involved, VAT/Sales tax is not payable the service go under Construction of Complex service (Section 65(105)(zzzh)

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