A company has Annual Maintenance Contract with a non company vendor for maintenance & daily cleaning of all toilets of its office and factory to ensure hygiene and cleanliness, for payment of 70000/- p.a . Service tax is not being charged by the vendor in his AMC bill. The Office and factory building is owned by the service recipient company.
Query:
1. Is this type of maintenance contract covered under reverse charge mechanism?
2. If yes then under which section and what is the rate?
With due respect to the reply given by my dear friend sumit ji (whom I believe has very good command over service tax law), in my view, the given service falls under the specific descripttion 'cleaning services' and shall not fall under 'works contract' as defined under sec. 65B(54). Even if some materials are provided by the service provider like say harpic or other cleaning goods are provided by the service provider, then also there is no transfer of property in goods. such goods are simply consumed in providing the service.
Hence reverse charge is not applicable in the given case.
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