Service Tax applicablity

This query is : Resolved

Deepak Goel (Querist)
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19 April 2009 Hi every body.

If a contractor recived some material from his client at free of cost and also not including in his bill. Pls tell me whether it will be include for the purpose of calculation of service tax or service tax not to charge on free material.

Dayal

Dayal (Expert)
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19 April 2009 Commercial or industrial construction service - Abatement - Does value, include cost of free materials supplied by the client? Interim stay granted
JUDGEMENT
This petition coming on for orders upon perusing the petition and the affidavit filed in support thereof and upon hearing the arguments of Mr. Aravind P. Datar, For M/s. K. Vaitheeswaran, Advocate for the petitioner the court made the following order: -
It is contended by Mr. Arvind P. Datar, Senior counsel that by taking queue from the explanation now added in Sl. No. 7 of the Notification No. 1/2006-ST dated 01.03.2006, the respondents are insisting that the value of the goods supplied and provided by the client of the Assessee would also be included. On a reading of the explanation, this court is prima-facie of the view that such an insistence is not in accordance with the explanation. To that extent there will be an interim order as prayed for. Notice.

Deepak Goel

Deepak Goel (Querist)
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19 April 2009 Can you tell me that case laws and also can available copy of interim stay order

Madhukar N Hiregange

Madhukar N Hiregange (Expert)
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20 April 2009 The arguments could be as under:
1) The gross value charged only can be taxed as per Sec67.
2) ST is payable only on payment basis and payment is not recived for the FOC materials.
]3) ST is not applicable on transfer of materials involved in a contract only VAT can be charged.
Therefore in my view there is no case for the dept. anyway.

Sanjay Soni

Sanjay Soni (Expert)
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20 April 2009 the Material is nowhere subject to Service tax only services can be brought under service tax. in the instant case no liability of service tax and also VAT is also not applicable

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