V.H.UGALE (ARTICLE ASS.) (32 Points)
13 December 2012HI,
We are awarding Work contract to Central Railways for maintaince work of rail track established in Plant area. Is service tax applicable in view of Negative list. Should we add Service tax clause in Work Order or not. Railway has not quoted Service tax in their offer. Please Suggest.
Vishwas.
Mallikharjun
(Deputy Manager)
(304 Points)
Replied 13 December 2012
Railways comes under Minister of raillways....
The service which you receive from Indian Railways covered under "Support service" defintion. Hence by virtue of notification no. 30/2012, you need to pay service tax under RCM @ 100%.
Jeevesh Mehta
(Advocate- Corporate Commercial & Indirect Tax Advisory)
(861 Points)
Replied 13 December 2012
Hi,
It will be a works contract as there might be material involved in execution of mainatainance wrk. Railways must charge service tax as per valuantion rules and Reverse charge shall be 50 : 50 on both the parties.
Regards
Vikas
(CA)
(1135 Points)
Replied 14 December 2012
I agree with Mallikharjun, and disagree with Jeevesh above. Government is not liable to pay tax on support services [Notification No.30/2012-ST dated 20 June 2012]
Hence, 100% reverse charge would be applicable.
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