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.
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.
CAclubindia
