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Sale or work contract
Sale of a machinery and it's installation at buyers place would be simply sale activity i.e. trading or work contract? Many times installation service is provided by vedors as bundle but not necessarily charged for installation. How it is to be treated under both circumstances?
Replies (6)
Quick Summary
It is a trading activity. Installation is a part of buying activity, charges are being included in the price of the machinery. It should be treated as part of sale price.
What is installation charges are mentioned separately in the invoice?
It is a trading activity, it is immaterial whether the installation charges are shown separately or not. If only installation services is provided it will cover under provision of service.
Installation charges should be a part of sales value
Kindly note that sale of machinery is a trading activity.
Principal activities is sale of machinery and installation activity is second one and price of machinery is inclusive of installation charges even installation charges shown seperately.
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