Service tax abatment

This query is : Open

Querist : Anonymous

Querist : Anonymous (Querist)

04 July 2013 Dear Sirs,
one of my client dealing with AC ducting business, the situation is:
He purchase the readymade ducting from his client and add:
Some Steel sheets
Glass Sheet
Nut and bolt & Labor
for all this he take a fixed amount including all this, So please suggest me
how service tax will be charge and is any abatement is available for him?
thanks in advance

Gopalkrishna Hegde ,CA,DISA

Gopalkrishna Hegde ,CA,DISA (Expert)
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04 July 2013 Hi

Based on the above facts.My view is that your client will fall under works contract service. as it involves both material and labour charges.

Since the client charges for bot material and labour together. He would be entitled to abatement of 30% that is 70% of total amount charged would be chargeable to service tax, based on rule 2A of Service Tax Valuation rules. as amended vide Notification No 24/2012

However if he is within Basic Exemption Limit there would not be any service tax.

CA Priti Surana

CA Priti Surana (Expert)
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04 July 2013 Intermediate production process in relation to goods on which excise duty is payable by the principle manufacturer is exempt from service tax, notf. no. 25/2012 S.T. Air Conditioners definitely are excisable products.

Things are not so clear in ur query. Whether ur client is selling his own ACs or is working for the one who sends him readymade ducting.

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