Service tax on works contract on reverse charge mechanism

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Querist : Anonymous

Querist : Anonymous (Querist)

08 May 2013 Dear Members,
One of my client gave the contract to ready the transfomer. He gave the biil without vat for materials, and service tax for labour charges. plz give clarification whether have to pay the service tax on reverse charge or not.
URGENTLY

THANKING YOU

Bhaskaran Chackrapani Warrier

Bhaskaran Chackrapani Warrier (Expert)

08 May 2013 1) If the service provider is a 'corporate entity' reverse charge will not apply.

2) If the service provider is 'non corporate' reverse charge attracts.

3) Rate of service tax ( presently three rates)depends on the nature of the work viz., original work or repair work or other works.

Sanjeev Kumar

Sanjeev Kumar (Expert)

23 May 2013 "contract to ready transformer" is subject to argument whether it is a contract for sale in which labour charges paid separately or otherwise are incidental and part of supply held by Hon'ble S.C. court cited Kone Elevator & Idea Cellular OR works contract.
if it is a contract for sale, than service tax is not applicable by all means.

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