Hi,
I have a query regarding abatement provided by notification no. 1/2006-Service Tax on Erection, Installation & Commissioning services.
For an example, suppose A Ltd. enters a composite contract of Rs. 100 for installation of elevators. (These elevators are not supplied by A Ltd. They are only installing the same.) Now, the contract is a composite contract and hence, involves both materials and labour. However, the material component involvement (consumables, accessories, parts, elevator shafts) for A Ltd. is hardly 5% of the contract value i.e. Rs. 5. Rest Rs. 95 is towards labour.
Whether in this case, the abatement of 67% as provided in the notification can be availed?
Also, it would be a really big help if a case law could be provided in this regard. I can also elaborate further if any other facts are required. Kindly comment and let me know.
Thanks,
Tanmay Mody
CAclubindia
