Works Contract Service, Service Tax

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’?

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1 Dated: 25-5-2022 By:- 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)

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2 Dated: 25-5-2022 By:- Kaustubh Karandikar

thanks Kasturi ji for your kind advice

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3 Dated: 26-5-2022 By:- 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

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4 Dated: 26-5-2022 By:- Kaustubh Karandikar

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

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5 Dated: 28-5-2022 By:- 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.

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