TMI Blogclarification relating to payment of serviceX X X X Extracts X X X X X X X X Extracts X X X X ..... Dear Sir, We have received an invoice from a firm charging 15% (14%+0.5%+0.5%)service tax for the work done by them. The work they have done is welding work in the overhead crane rail . My question is whether i have to pay full tax to him or I have to pay 50% tax to the govt and ask the firm to pay the balance 50% or what is the procedure. Kindly explain in detail. Thanks Regards, S.Ramakr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ishnan - Reply By KASTURI SETHI - The Reply = Dear Sh.S.Ramakrishan Ji, From your query, it appears to me that it is a case of pure labour. Pure labour means service has been provided without material. If it is a case of pure labour, this service cannot be classified under Works Contract Service and hence no RCM is applicable. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... You have also mentioned the word, ' Rail' . Does it mean overhead crane pertain to Railways ? Pl. clarify your query in detail so as to enable the experts to file fool-proof reply. - Reply By Rajagopalan Ranganathan - The Reply = Sir, You have to pay the service tax at full rate since, as explained by Shri. Kasthuri Sir, it is not a work contract service since no goods/property has b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... een transferred by service provider while providing the service. Therefore reverse charge mechanism is not applicable to you. - Reply By MARIAPPAN GOVINDARAJAN - The Reply = I also agree with the views of experts. - Reply By Ganeshan Kalyani - The Reply = Sir, I agree with the views submitted by my learned colleagues. It enriched my knowledge. Generally, in a company there is Store Departme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt which keeps all the maitenance related items to cater to the urgency. In you case I am assuming that the items required for welding work was supplied by you to the service provider. As a result, he had provided only labour service and therefore service is charged at full rate of tax on the invoice raised by him. Hence in my considered view no need to pay service tax under reverse charge mechani ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sm. Thanks. - Reply By Ramakrishnan Seshadri - The Reply = Dear Sir, Thanks for your reply by experts. In our case the welding rods were not supplied by us. All the materials were used by supplier from his own. Apart from that this rail is nothing but the overhead crane movement in a factory for moving the craned here and there. To strenghthen the movement the rails are welded. This is the w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ork.Please explain now Sir. - Reply By Ganeshan Kalyani - The Reply = Sir, based on your information it seems that the provider is charging service on higher side. Both material and labour service is provided by him so the valuation rule should have applied where only 70% of Value of contract is subject to service tax. You may educate the service provider accordingly. Thanks. - Reply By KASTURI ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... SETHI - The Reply = Sh.Seshadri Ji, Agreed with Sh.Ganeshan Kalyani, Sir. Service Tax is to charged on 70% of the gross amount. Since service has been provided with material, service would fall under the category of 'Works Contract Service' and RCM is applicable. Liability of Service tax is to be divided by 50 :50. 50 % is to be paid by Service Provider and 50% by service Receiver. N ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... otification No.30/12-ST dated 20.6.12 as amended (Serial no.9 of the Table.) refers. - Reply By Ganeshan Kalyani - The Reply = Sir, nice reply submitted by Sri Kasturi Sir. Thanks. - Reply By JSW CEMENT LIMITED - The Reply = Sir In my opinion service tax at full rate would be appliable as welding work may not be considered as works contract. In a works contract there should be transfer in p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... roperty along with provision of service. In the instant case, welding rods are consumed in provision of service but there is no transfer in property. This is my opinion. - clarification relating to payment of service - Query Started By: - Ramakrishnan Seshadri Dated:- 21-6-2016 Service Tax - Got 9 Replies - Service Tax - Discussion Forum - Knowledge Sharing, reply post by an expert, personal op ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... inion Tax Management India - taxmanagementindia - taxmanagement - taxmanagementindia.com - TMI - TaxTMI - TMITax ..... X X X X Extracts X X X X X X X X Extracts X X X X
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