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Free supplies in works contract service

Service Tax - By: - Ganeshan Kalyani - Dated:- 23-12-2015 Last Replied Date:- 24-12-2015 - Works contract service is a complex subject for discussion whether it may be for valuation of service in the contract price or for computing value added tax in the consideration. This complication manifolds while determining whether free supplies should form part of gross amount or not when there is free supplies from service receiver to service provider. The CESTAT, New Delhi in case of M/s. Bhayana Build .....

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d also be included for availing benefits under Notification No. 15/2004-ST, dated 10.09.2004 as amended by Notification No. 4/2005-ST dated 01.03.2005? As per Section 67 of Act which deal with valuation of taxable services defines that any consideration whether monetary or otherwise should have flown or should flow from service recipient to service provider and should accrue to benefit of later. The value of free supplies by services recipient to service provider does not constitute a non-moneta .....

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esponding value whereof was received by service provider, to accrue to his benefit, whether independently specified as attributable to specific material/goods incorporated or otherwise, would alone constitute gross amount charged. Value of goods and materials supplied free of cost by a service recipient to provider of taxable construction service, being neither monetary or non-monetary consideration paid by or flowing from service recipient, accruing to benefit of service provider, would be outs .....

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ced by Notification No. 4/2005-ST. Though this judgment is favorable to assesses but the fact is litigation cannot be ruled out. (The above article is authored by Ganeshan Kalyani and he can be reached via email on gganeshan.k@gmail.com). - Reply By Ganeshan Kalyani - The Reply = Please discuss on this article. though there is case law in support but department tend to issue notices to claim inclusion of free issue for arriving at service tax amount. - Reply By YAGAY AND SUN - The Reply = It was .....

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