Works Contract Service, Service Tax

[Kaustubh Karandikar]

XYZ is providing Annual Maintenance Contract Services of Air conditioner. During maintenance, if any parts need to be replaced, he is buying the same are charging to the customer for the same. Will it fall under ‘Works Contract Service’ definition under the ‘Service Tax Regime’?

Posts / Replies

[KASTURI SETHI]

Dear Sir,

NOT taxable. That is sale and not part/constituent of service. Presumably, VAT stands paid on the part/spares used in providing AMC.. Service Tax and VAT are mutually exclusive.

Here are relevant case laws :

2018 (5) TMI 1227 - CESTAT NEW DELHI REDINGTON INDIA LTD. Versus COMMR. OF C. EX. (DGCEI ADJUDICATION CELL)

[Kaustubh Karandikar]

thanks Kasturi ji for your kind advice

[KASTURI SETHI]

Dear Sir,

Also go through the following judgement of the Supreme Court :- (You would be able to extract benefit from this case law.)

2008 (1) TMI 2 - SUPREME COURT IMAGIC CREATIVE PVT. LTD. Versus COMMISSIONER OF COMMERCIAL TAXES

[Kaustubh Karandikar]

thank you very much Kasturi ji. It will definitely help to to come to a concrete conclusion.

[Ganeshan Kalyani]

Sri Kasturi Sir has clarified the query very well. As per the judgment the appellant is not charging any money on the components which is replaced by the appellant during the annual maintenance contract - when it is so, demand of tax on parts used during AMC do not sustain - appeal allowed - decided in favor of appellant.