Service tax on work contracts.

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

05 March 2013 Dear Experts,
Please solved my query :

Brief description of Service :
One of my friend are carrying AMC with a company. They charges a fixed amt for AMC contract.
In addition to that any other installation of equipment they charges for as per for material which is chargeable for VAT & other bill for installation of that equipment.

My query is as below :
1) What will be service tax on AMC which is provided by my friend ?
2) what rate of service tax on installation of equipment for supplying of material other than AMC contract?
3) will there be any reduction or abatement on work contract of AMC charges or we have to pay 12.36 % of service tax.
Pl. Solve my query.
Thanks in advance.

CA Nagaraj Bhat

CA Nagaraj Bhat (Expert)
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05 March 2013 1) If AMC involves material and labour it amounts to works contract. If your friend is individual,HUF or partnership firm, whether registered or not, including Association of persons, located in the taxable territory then tax liability will be on 50% of service value.
2) For installment of equipment ST is 12.36% (normal rate), no service tax on supplying of material, since VAT has been paid.
3)I have answered this in 1 st point.

CA Nagaraj Bhat

CA Nagaraj Bhat (Expert)
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