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Hire charges on dumpers & earth moving machinery

Manoj Agarwal (Service Tax Consultant Rourkela ServiceTaxExpert@yahoo.com) (3456 Points)

29 December 2012

A partnership firm has given on Hire Dumpers, Tippers, JCB & Loaders to a body corporate under a service order. As per the order, the hire charges are inclusive of diesel and lubricants. For Extra Hours, extra charges are billed.

1) Whether any abatement is available on above service?

2) Can this service fall under Works Contract?

3) Can the payment of service tax be made on receipt basis?

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8 Replies

MudraMantri (Wantapreneur) (491 Points)
Replied 30 December 2012

Hi Manoj,

1) The service falls under suppy of tangible goods services under section 65 (105) (zzzzj). Abatement is not available, However eexemption to Small Scale Service Providers can be availed, in case service provider fulfills the prescribed conditions. Further, All costs/expenditure incurred (Diseal, etc) by the service provider shall be treated as consideration for the service provided or to be provided. However, The service provider may show these expenses separately in invoices, act as pure agent and thus can avoid inclusion of these costs in Value of Service.

2) NA, Refer point 1. Further, to fall under works contract services are required to fulfill certain conditions, which this service is not fulfilling.

3) Service tax is now payable on Due basis.

Please let me know in case you need any clarifications.

Regards

1 Like

Ramprasad (1 Points)
Replied 06 May 2016

We would be hiring JCBs in our factory, Diesel is provided by us . Under normal course, the JCB vendor ( service provider) will pay Service tax on his hire charges. Is he required to pay Servcie tax on the Diesel cost also, even though he is not providing the diesel. Can you clarify on this point.

Thank you in advance,

ramprasad y.

Ranjit Kumar (Accountant) (28 Points)
Replied 06 May 2016

yes it is a work contract

Ranjit Kumar (Accountant) (28 Points)
Replied 06 May 2016

if addressee is ssp he is liable to pay s.tax receipts basis.

Ranjit Kumar (Accountant) (28 Points)
Replied 06 May 2016

abatement available

Mohd Sameer (Sr. Accountant) (9 Points)
Replied 03 October 2017

I provide Dumper & Crains on rent., We do job work like a soil digging by JCB. can you suggest me SAC Code for same servies.

1 Like

Mohd Sameer (Sr. Accountant) (9 Points)
Replied 03 October 2017

I provide Dumper & Crains on rent., We do job work like a soil digging by JCB. can you suggest me SAC Code for same servies.

ARUN SITARAM WANI (ACCOUNTANT) (25 Points)
Replied 11 April 2018

Individual person GSTIN holder has given on Hire JCB to a body corporate under a service order. As per the order, the hire charges are inclusive of diesel and lubricants. please Tell me GST rate on Hire Charges of JCB machinery