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Service tax

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(Querist)
25 April 2012 When a contractor providing Service of Construction of commercial/industrial building
with material, it covers under the service of works contract ,what is the logic behind sustaining the abatement of 67% in industrial/commercial contracts.
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CA NIKHIL OZA

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CA NIKHIL OZA (Expert)
25 April 2012 such service will come under works contract only if vat is also payable on such material so transfrd....
the logic is to make chargeble onle the service part(i.e. to remove material amount from such)
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Ki$hor B

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Ki$hor B (Expert)
25 April 2012 Agree with Nikhil.

Manish, the idea is to exclude the material component and there by levy Tax only on the services rendered.

Further, I suppose this practice is mostly followed for the contracts where no proper records are maintained for bifurcating the total value into the material supplied & services rendered.
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