Service tax rate w.e.f. july 2012

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KAUSHIK ROY (Querist)
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04 September 2012 What is the percentage of service charge on which service tax payable w.e.f. 1st July 2012? Suppose a bill of RS. 12000.00 raised under Maintenance or Repair Service for deputing an engineer to attend to fault of Machine in a plant. Is ST payable on 70% of 12000.00 as per notification 24/2012 or on 100%. If 70% will service receiver pay the rest? Kindly help with notification no.

Vignesh

Vignesh (Expert)
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05 September 2012 Dear Kaushik,

If the services rendered by an Engineer involves replacement of any part or sale of goods then the activity will be treated as Works Contract. On the otherhand, if the services rendered involves no transfer of property (or sale) then it is purely service and would not fall under Works Contract.
Therefore, if the activity is a works contract then tax is payable on 70% of the invoice value i.e. (12.36% on 8400).
No, the service receiver will not be liable to pay tax on balance 30% of invoice value.

However, if the service provider is an individual or a partnership firm then it is advisable to refer Notification No. 30/2012 for ST payable on reverse charge basis.

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