Applicability of service tax

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CA. Rashi Goyal

Chartered Accountant

512 Points Joined December 2008

A company is engaged in amnufacturing of machines and it also provides servive relating to repairs and annnual maintainence contract for the machines.

The company delivers the machine at the buyers premises and it also provided the services relating to the installation. It charges the excise duty on the cost of machine and installation charges.

Query: Did company laible to pay service tax on installation charges when it is paying the excise duty on the same amount and intallation is a part of the sale of machine.

Replies (4)

Monuettan

Sr.Executive

59 Points Joined February 2010

have they taken service tax RC for Goods transport Agency.

Whether they are taking service tax credit for inputs which they receive.

Regards

Sunil Kumar

CA Unnikrishnan Nair N

Chartered Accountant

2083 Points Joined February 2011

If installation charges are included in the value for excise, service tax is not payable on such charges.

ISUB KHAN

Assistant Accountant

240 Points Joined January 2011

Query: Did company laible to pay service tax on installation charges when it is paying the excise duty on the same amount and intallation is a part of the sale of machine.

answer:company not liable to serivce tax on installation charges.installation charges are included in the value for excise.

Anil Kumar Meena

Assistant Manager

475 Points Joined March 2009

I have the contradict case of isub khan answer,

In Lincoln Helios(india) Ltd VS CCE(2006), it was held that service tax is payable on charges of erection and commissioning even if assesse has paid excise duty on entire value of contract inculding erection and commisioning charges.

Please provide the caselaw in support fo your answer.

Thanks,

Anil Kumar Meena