TMI BlogConstruction Service or Works Contract Service ??X X X X Extracts X X X X X X X X Extracts X X X X ..... Sir, Our company has executed contract for following activities 1. Construction of compound wall at dam under Corporate Social Responsibility project 2. Local Road renovation under Corporate Social Responsibility 3. Repairs maintainance of office building which includes civil work, painting work, carpenter work, sanitation work etc.. under which category above activities fall ? Whether se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rvice covered under RCM ? Service Provider is non body corporate. what is key factor for distinguish between construction service and works contract service ? thanks - Reply By KASTURI SETHI - The Reply = Sh.Paresh Ayadi Ji, KEY FACTOR : In case Construction service is provided with material, it would fall under Works Contract Service and if construction service is provided wit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hout material, then only pure labour is involved. Pure labour cannot classified under WCS. Then it would fall under respective erstwhile category i.e. Commercial or Industrial Construction Service, Construction of Residential Complex, Erection, Commissioning etc. If pure labour, no RCM, no abatement is allowed. Entire liability is cast upon Service Provider i.e. Contractor. Remaining queries ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... are to be examined issue-wise. It will take time. - Reply By Ganeshan Kalyani - The Reply = I agree with Sri Kasturi Sir, though preliminary reply can be casted but the detailed and desired requires time. The arrangement of supply of material if any by the service receiver to the provider of the service is required to be seen. And several services has been mentioned by you. Hence I too view tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t considerable time is justifiable. Thanks. - Reply By KASTURI SETHI - The Reply = Concrete reply is possible only after going through the terms and conditions of the contract .However, preliminary point-wise reply is as under:- 1. Exempted vide Notification No.25/12-ST dated 20.6.12 as amended. Serial No.12(d) 2. Exempted vide Notification No.25/12-ST dated 20.6.12 as amended. Seria ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l No.13(a) 3. Exempted vide Notification No.25/12-ST dated 20.6.12 as amended. Serial No.12(a) Prima facie , these fall under Works Contract. Service Receiver should be business entity for the purpose of RCM otherwise not entitled to the facility of RCM. - Reply By Ganeshan Kalyani - The Reply = Sir, my additional views is : abatement in case of original work is 60% and in case of re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pair and maintenance the abatement is 30% of the total works contract amount. Thanks. - Reply By KASTURI SETHI - The Reply = Sh.Ganeshan Kalyani Ji, Sir, Legally we cannot call 60% and 30% as abatement for original works and maintenance, repair, renovation etc. respectively. Actually, Service Portion @40% and 70% has been determined for payment of ST vide Notification No.24/12-ST dated 6.6.1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2 as amended. - Reply By Ganeshan Kalyani - The Reply = Sri Kasturi Sir, thanks for correcting me. Though we call it as abatement generally, but legally it is a service portion involved in the execution of works contract. This is as per Service Tax (Determination of Value ) Rules, 2006 . As per the rule 40% of Value of Gross amount and 70% of Value of Gross amount is the Value of Service on w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hich Service tax shall be worked out. Thanks once again Sir. - Construction Service or Works Contract Service ?? - Query Started By: - paresh ayadi Dated:- 26-5-2016 Service Tax - Got 6 Replies - Service Tax - Discussion Forum - Knowledge Sharing, reply post by an expert, personal opinion Tax Management India - taxmanagementindia - taxmanagement - taxmanagementindia.com - TMI - TaxTMI - TMITa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... x ..... X X X X Extracts X X X X X X X X Extracts X X X X
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