Query on works contract

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

20 October 2014 Dear Sir,
Type of work:Installation of air conditioner,testing and commissioning.
Party charged service tax total 100% on the invoice whether composition scheme of (60/40)or (40/60)is applicable and in the service tax portion applicable, whether we need to pay only 50% of service tax as service receiver liability under reverse charge mechanism........plzzzzzzzzzzzzz reply me as soon as possible.

Thank u

Annu Agarwal

Annu Agarwal (Expert)
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20 October 2014 The contract of Installation of air conditioning along with testing and commissioning is a works contract.Only the service tax portion shall be chargeable to service tax.Refer clause(h) of section 66E.
Valuation:If the serviec portion cannot be determined as per Rule 2A(i) ,then value of service can be determined by applying rule 2A(ii) wherein service tax shall be levied only on 40% of the total amount charged.

50% Option: 50% service tax shall be paid by the service receiver under reverse charge if the service provider is a Individual,HUF,partnership firm or AOP and Serviec receievr is a body corporate.

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