Work contract under rcm

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Arihant (Querist)
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17 April 2013 If a factory is giving contract to manufacture certain pieces and the payment is made on the basis of number of pieces manufactured with the material being supplied by the company and workers are also not controlled by the company but by the contractor. Whether the same is covered by Reverse Charge mechanism for work contract ? Can u pl explain the same with the help of the defination of Work Contract ?

CA Vikas Acharya

CA Vikas Acharya (Expert)
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17 April 2013 this is not work contract, as the contractor is not giving services plus materials (material is yours).

- Work Contract Meaning 65B(54): WC means a contract wherein transfer if property in goods involved in the execution of such contract is leviable to tax as sale of goods AND such contract is
- for the purpose of carrying out construction, erection, commissioning, installation, completion, fitting out, repair, maintenance, renovation, alteration of any Movable or Immovable property OR
- for carrying out any other activity or a part thereof in relation to such property.

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Arihant

Arihant (Querist)
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18 April 2013 Thank you for your reply Sir. Even if the material belong to the job worker..i think it will not be covered if the process amount to manufacture as manufacture is specifically excluded in negative list.

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