Tax liability for electrical testing work???
This query is : Resolved
Querist : Anonymous
Querist :
Anonymous
(Querist)
13 October 2011
Respected All,
I want to know about tax liability for providing electrical testing work service.
Shall I to apply or obtain SERVICE TAX NO.????
Shall I to apply or obtain SALES TAX NO.????
Shall I to apply or obtain VST NO.???? (I’m situated in Gujarat)
Or any other tax liability.
Further to above, I want to know about tax liability ofr work contract.
For under taking supply and installation work of electrical items.
Kindly guide me suitably???
Regards,
T.D.
I want to know about tax liability for providing electrical testing work service.
Shall I to apply or obtain SERVICE TAX NO.????
Shall I to apply or obtain SALES TAX NO.????
Shall I to apply or obtain VST NO.???? (I’m situated in Gujarat)
Or any other tax liability.
Further to above, I want to know about tax liability ofr work contract.
For under taking supply and installation work of electrical items.
Kindly guide me suitably???
Regards,
T.D.
Guest
Guest
(Expert)
13 October 2011
Electrical testing work service is a taxable service and you have to charge service tax if your gross receipts from all taxable services are more than Rs 10 lakhs.
If you are also supplying goods in the course of provision of electrical testing work service, you have to pay VAT under works contract or on individual value of goods supplied.
If you are also supplying goods in the course of provision of electrical testing work service, you have to pay VAT under works contract or on individual value of goods supplied.
Querist : Anonymous
Querist :
Anonymous
(Querist)
13 October 2011
Respected Mr.Dinesh Kumar,
Thank you very much for your valuable reply.
Request you to kindly clarify my below doubts :
(1) Is than any limit for turnover after that VAT No. is become compulsory?
(2) Once registered for service tax and VAT no. than any regular formalities (like income tax return in case of PAN) is there? Or Maintenance of some accounting documents etc. in case of no business done after registration of ST & VAT?
(3) It is mandatory to apply for Employee Provided Fund org. ?? What is the requirement and condition?
(4) It is mandatory to apply for Employee State Insurance Corp. ??? What is the requirement and condition?
(5) It is required to obtain labour license? What is the requirement and condition?
Request to kindly help, It will be a great help.
Thank you very much for your valuable reply.
Request you to kindly clarify my below doubts :
(1) Is than any limit for turnover after that VAT No. is become compulsory?
(2) Once registered for service tax and VAT no. than any regular formalities (like income tax return in case of PAN) is there? Or Maintenance of some accounting documents etc. in case of no business done after registration of ST & VAT?
(3) It is mandatory to apply for Employee Provided Fund org. ?? What is the requirement and condition?
(4) It is mandatory to apply for Employee State Insurance Corp. ??? What is the requirement and condition?
(5) It is required to obtain labour license? What is the requirement and condition?
Request to kindly help, It will be a great help.
26 July 2025
Got it — you’re asking about tax and compliance liabilities related to providing electrical testing services and electrical installation work in Gujarat, India. I’ll break down the answers based on your questions and the 2011 context you mentioned (some rules may have changed after GST introduction in 2017, but here’s how it worked before GST):
---
### 1. Tax Liability for Electrical Testing Services:
* **Service Tax:**
Electrical testing services were considered taxable services under service tax before GST.
* If your aggregate turnover from all taxable services exceeds **Rs 10 lakhs** in a financial year, you were required to **register for Service Tax** and charge service tax on your invoices.
* Service tax registration number is mandatory once this threshold is crossed.
* **Sales Tax / VAT:**
Since electrical testing is a **service**, VAT (sales tax) generally does not apply to the service part. However, if your service includes **supplying goods/materials** (like electrical equipment, testing instruments), VAT would apply on the **value of goods supplied**.
* VAT registration was mandatory if your turnover from sales of goods exceeds the threshold limit (varied by state but generally around Rs 5 lakhs or more).
* In Gujarat, this meant you had to register for VAT if your sales turnover crossed that limit.
* **Works Contract Tax (VST):**
For **supply and installation of electrical items** (a works contract), the value of goods and service is split. Gujarat had a **VAT on works contract (VST)** regime before GST.
* You had to register for VST if you undertook contracts involving supply + installation/fabrication.
* VST was levied on the entire contract value or the material portion (as per state rules).
* So, yes, for electrical installation work, you needed to register and pay VST in Gujarat.
---
### 2. Clarifications on Your Doubts:
**(1) Is there any limit for turnover after which VAT registration is compulsory?**
Yes, VAT registration was compulsory if your sales turnover (of taxable goods) exceeded the state threshold (around Rs 5 lakhs in Gujarat, but check exact figures). For service tax, the limit was Rs 10 lakhs turnover in services.
**(2) Once registered for service tax and VAT, are there any regular formalities?**
* Yes, after registration:
* You must **file periodic returns** (monthly/quarterly for VAT, half-yearly/monthly for service tax depending on rules).
* Maintain proper **books of accounts, invoices, and records** as per tax law.
* Even if no business is done, some states require filing a **nil return** to keep the registration active.
* PAN and Income Tax filings are separate but related compliance.
**(3) Is it mandatory to apply for Employees Provident Fund Organization (EPFO)?**
* Yes, if you have **20 or more employees**, EPF registration is mandatory under the Employees Provident Fund & Miscellaneous Provisions Act, 1952.
* Even with less than 20 employees, you can voluntarily register.
**(4) Is it mandatory to apply for Employee State Insurance Corporation (ESIC)?**
* Yes, if you have **10 or more employees** (some states 20), and they earn less than Rs 21,000 per month (limits might have changed), you must register for ESIC.
**(5) Is labour license required?**
* Labour license under the Contract Labour (Regulation & Abolition) Act, 1970, is required if you employ **contract labour** and the establishment employs **20 or more contract workers**.
* If you directly employ workers, this may not be necessary, but labour laws vary depending on the nature of work and number of employees.
---
### Summary Checklist for You (2011 scenario):
| Requirement | Threshold/Condition | Applicability |
| ---------------------------- | ----------------------------------------------------- | --------------------------------------------------------------- |
| **Service Tax Registration** | > Rs 10 lakhs turnover in services | Mandatory for electrical testing services |
| **VAT Registration** | > Rs 5 lakhs turnover in goods | Mandatory if supplying goods in course of service/work contract |
| **VST Registration** | If undertaking works contract (supply + installation) | Mandatory for installation contracts in Gujarat |
| **EPF Registration** | 20 or more employees | Mandatory |
| **ESIC Registration** | 10 or more employees | Mandatory |
| **Labour License** | 20 or more contract labourers | Required if contract labour employed |
---
### Important:
* The above applies for the **pre-GST era**.
* Since July 2017, GST replaced Service Tax, VAT, and VST. Under GST, you'd register for GST if turnover exceeds Rs 20 lakhs (Rs 10 lakhs for some states), charge GST on services and goods, and file GST returns.
* For updated info, GST rules should be checked.
---
If you want, I can help you with the **current GST-based framework** or suggest how to maintain compliance going forward. Would you like that?
---
### 1. Tax Liability for Electrical Testing Services:
* **Service Tax:**
Electrical testing services were considered taxable services under service tax before GST.
* If your aggregate turnover from all taxable services exceeds **Rs 10 lakhs** in a financial year, you were required to **register for Service Tax** and charge service tax on your invoices.
* Service tax registration number is mandatory once this threshold is crossed.
* **Sales Tax / VAT:**
Since electrical testing is a **service**, VAT (sales tax) generally does not apply to the service part. However, if your service includes **supplying goods/materials** (like electrical equipment, testing instruments), VAT would apply on the **value of goods supplied**.
* VAT registration was mandatory if your turnover from sales of goods exceeds the threshold limit (varied by state but generally around Rs 5 lakhs or more).
* In Gujarat, this meant you had to register for VAT if your sales turnover crossed that limit.
* **Works Contract Tax (VST):**
For **supply and installation of electrical items** (a works contract), the value of goods and service is split. Gujarat had a **VAT on works contract (VST)** regime before GST.
* You had to register for VST if you undertook contracts involving supply + installation/fabrication.
* VST was levied on the entire contract value or the material portion (as per state rules).
* So, yes, for electrical installation work, you needed to register and pay VST in Gujarat.
---
### 2. Clarifications on Your Doubts:
**(1) Is there any limit for turnover after which VAT registration is compulsory?**
Yes, VAT registration was compulsory if your sales turnover (of taxable goods) exceeded the state threshold (around Rs 5 lakhs in Gujarat, but check exact figures). For service tax, the limit was Rs 10 lakhs turnover in services.
**(2) Once registered for service tax and VAT, are there any regular formalities?**
* Yes, after registration:
* You must **file periodic returns** (monthly/quarterly for VAT, half-yearly/monthly for service tax depending on rules).
* Maintain proper **books of accounts, invoices, and records** as per tax law.
* Even if no business is done, some states require filing a **nil return** to keep the registration active.
* PAN and Income Tax filings are separate but related compliance.
**(3) Is it mandatory to apply for Employees Provident Fund Organization (EPFO)?**
* Yes, if you have **20 or more employees**, EPF registration is mandatory under the Employees Provident Fund & Miscellaneous Provisions Act, 1952.
* Even with less than 20 employees, you can voluntarily register.
**(4) Is it mandatory to apply for Employee State Insurance Corporation (ESIC)?**
* Yes, if you have **10 or more employees** (some states 20), and they earn less than Rs 21,000 per month (limits might have changed), you must register for ESIC.
**(5) Is labour license required?**
* Labour license under the Contract Labour (Regulation & Abolition) Act, 1970, is required if you employ **contract labour** and the establishment employs **20 or more contract workers**.
* If you directly employ workers, this may not be necessary, but labour laws vary depending on the nature of work and number of employees.
---
### Summary Checklist for You (2011 scenario):
| Requirement | Threshold/Condition | Applicability |
| ---------------------------- | ----------------------------------------------------- | --------------------------------------------------------------- |
| **Service Tax Registration** | > Rs 10 lakhs turnover in services | Mandatory for electrical testing services |
| **VAT Registration** | > Rs 5 lakhs turnover in goods | Mandatory if supplying goods in course of service/work contract |
| **VST Registration** | If undertaking works contract (supply + installation) | Mandatory for installation contracts in Gujarat |
| **EPF Registration** | 20 or more employees | Mandatory |
| **ESIC Registration** | 10 or more employees | Mandatory |
| **Labour License** | 20 or more contract labourers | Required if contract labour employed |
---
### Important:
* The above applies for the **pre-GST era**.
* Since July 2017, GST replaced Service Tax, VAT, and VST. Under GST, you'd register for GST if turnover exceeds Rs 20 lakhs (Rs 10 lakhs for some states), charge GST on services and goods, and file GST returns.
* For updated info, GST rules should be checked.
---
If you want, I can help you with the **current GST-based framework** or suggest how to maintain compliance going forward. Would you like that?
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