Service tax

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Querist : Anonymous

Querist : Anonymous (Querist)

17 October 2014 is service tax applicable on materials ?

@VaibhavJ

@VaibhavJ (Expert)
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17 October 2014 If you sale material & show it as separate item in invoice then no st is applicable.

Thanks

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Querist : Anonymous

Querist : Anonymous (Querist)

17 October 2014 Thank you sir for the reply. i will illustrate the whole scenario below:

I have received landscaping material for landscaping of my place. And the bill is only for the material portion and the supplier has charged VAt and service tax both. Labour work is done by some other person. Is the charging of service tax by him is correct ?

Aashok Kumar Sharma

Aashok Kumar Sharma (Expert)
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24 July 2025 Thank you for the detailed scenario — this helps clarify your situation.

Let’s break it down:

📌 Your Case:
You received landscaping materials only (no service or labor from this supplier).

Supplier raised an invoice only for material, but charged both VAT and Service Tax.

Labor was done by someone else (a separate entity/person).

❌ Is Service Tax Applicable on Materials Only?
No, it is not.

If the invoice is exclusively for supply of goods/materials, then:

VAT is applicable ✅

Service Tax is not applicable ❌ — because no service is provided

📑 Relevant Principles:
Under the Service Tax law (pre-GST regime):

Service Tax applies only to services, not to sale of goods.

If there is a composite contract (materials + service), valuation rules apply (e.g., Works Contract Rules or abatement).

But if there is clear segregation, and a person is only supplying goods, then only VAT applies.

In your case:

Invoice = only materials

No bundled supply or works contract

No service component

Therefore, Service Tax charged is incorrect.

✅ What You Can Do:
Ask the supplier to revise the invoice and remove Service Tax.

If they refuse, and you’ve already paid it, they must either deposit it with the department (if not already) or refund it to you.

You may also check with your local jurisdictional service tax officer for complaint or refund route if needed.

📝 Summary
Component Tax Applicable?
Landscaping material ✅ VAT only
Service Tax ❌ Not applicable
Labor (separate person) ✅ Service Tax may apply if billed separately

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