Service tax-reverse charge-works contract

Queries 857 views 3 replies

What are cases we have to pay reverse charge (Service tax) on works contract.As per service tax rules works contract includes works(labour+material) jobs on movable & immovable property.Is it on one bill/Written agreement is necessary.What if we buy materials from one & labour services from other.

Please comment on the applicability of reverse charge.(service provided by parties other than companies)

1)material from supplier & work done by company staff (employees)

2)materials from supplier "A" & work done by "b" (outside labours)

3)Vehicle maintenance bills.(material bill) -vat charged,service amount is not specifically mentioned.

4) Painting contracts.

5)AMC -Service only as per agreement say Rs.100,000 a year.spare charges etc..& incurred spare cost Rs.50,000.Billed both under seperate invoice.

Replies (3)

For supply of material no RC/JC

Only labour job - no RC/JC

Vhecile maintenance - some showrooms chagre the labour and material separately - then no RC/JC. f only VAT cagred- may not be correct.

Paitining contract woth paint by painter is a wc- JC applicable - 50% by provider if over 10 Lakhs and 50% by receiving Compnay.

Only service agreement - no RC/JC.

Sir,can please explain what is JC.Is it works contract tds under state VAT.

Please comment on the applicability of reverse charge.(service provided by parties other than companies)

1) Material from supplier & work done by company staff (employees)
a) No Service Tax under Reverse Charge
b) VAT will be charged by supplied for material supplied.

2) Materials from supplier "A" & work done by "b" (outside labours)
a) VAT would be charged by supplied A on goods supplied
b) No Service Tax - as no service is rendered by supplied A. 

c) Service Tax - under reverse charge (under Manpower Supply Service) ONLY if labours worked under direct supervison & control of the company for whom work/job is done by labourers.

3)Vehicle maintenance bills.(material bill) -vat charged,service amount is not specifically mentioned.

a) Transaction will fall under works contract service & would attract VAT & Service Tax under
    reverse charge.
    i)  VAT on Materail Value
   ii)  Service Tax on 50 % portion of 70 % value of the above inovice.

4) Painting contracts.

a) Transaction will fall under works contract and would attract service tax under reverse charge will be payable (Service Tax on 50 % portion of 70 % value)

5)AMC -Service only as per agreement say Rs.100,000 a year.spare charges etc..& incurred spare cost Rs.50,000.Billed both under seperate invoice

a) Since the AMC contract is specificaly for SERVICE only, therefore it would not attract service tax under reverse charge, however service provider has to charge service tax if his turnover exceeds 10 Lakhs.
 

 

 


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