Determination of value of service

This query is : Resolved

P K CHOHAN (Querist)
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07 August 2012 Kindly clarify whether any free issue of material (like cement, structure steel, etc) by the service receiver to the contractor (service provider) for the execution of the works contract will form the part of the gross value of taxable service for service tax purposes.

It is further stated that however some of the material (like bricks, sand, boulders, stone, etc if any) is in the scope of the contractor (service provider) and same is to be brought by him(service provider)for the execution of the works contract. (i.e the same is neither issued free of cost nor on chargeable basis by the service receiver)

Kindly clarify the position quoting relevant section / notification / rule / explanation etc.

Regards
P.K.Chohan

CA NIKHIL OZA

CA NIKHIL OZA (Expert)
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08 August 2012 If such Contractor pays s.tax under composition scheme then in such case any material issued but service receiver shall also be included in gross amount charged by contractor..

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