Whether the service comes under work contract

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pooja (Querist)
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19 January 2015 An Individual is providing service of white washing of buildings (with Labour & material). whether the service will come under work contract in service tax. and if yes, then whether it comes under original construction on which service tax is charged @ 40% of Gross value charged (inclusive of material) under Rule 2A(ii)(i) or Service tax will be charged @ 70% under Rule 2A(ii)(iii)

CMA MALHAR BEHERA

CMA MALHAR BEHERA (Expert)
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19 January 2015 yes.It will be regarded as works contract and are liable to service tax under reverse charge mechanism and with the amended position in law, tax would be calculated on the 70% of the total bill value @ 6.18% (i.e. 50% of the 12.36%).

Note: 40% is applicable only on execution of original work and 70% on repair/renovation/restoration/maintenance

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pooja

pooja (Querist)
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19 January 2015 i agree with you sir, but incase the contractor is white washing in construction as well as in wight washing of old construction then the respective %ages will be charged or a single percentage on all contracts will be charged by him

Note:- whether white washing comes under Rule 2A(ii)(b) or Rule 2A(ii)(c)as completion and finishing services.

pooja

pooja (Querist)
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CMA MALHAR BEHERA

CMA MALHAR BEHERA (Expert)
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19 January 2015 Rule 2A(ii)(b)- in case of works contract entered into for maintenance or repair or reconditioning or restoration or servicing of any goods, service tax shall be payable on seventy percent. of the total amount charged for the works contract.

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