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Rishubh Mathur (Analyst -Taxation)     29 August 2011

Project - AS 2 or AS 7?

hi friends!

Please clarify where a company has been engaged as agent for input procurement/ supply for a large project by the main contractor, whether AS 2 (treating supplies as inventory) is applicable or AS 7 (treating it as contract) ???

 3 Replies

CS Bijoy

CS Bijoy (Expert)     30 August 2011

Here the service is come under contract, so as 7 will be applicable.

Dhanabal Ramasamy

Dhanabal Ramasamy (CHARTERED ACCOUNTANT)     30 August 2011


I dont think supply of material to main contractor is any kind of service as meant in the AS 7. It is to be treated as inventory and AS 2 will be applicable.


krishnamohan (sr.auditor)     17 October 2015

AS 7 will be applicable not the AS -2 

and above all the Main contractor has to entrust the Work with Work order not any P.O(Purchase Order) so the TDS as contracts of sub-contractor's applicable and Service tax should be levied by the service render for work order

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