Applicability of rcm

This query is : Resolved

gurusaiprasannakumar (Querist)
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13 March 2014 Dear All,

Please tell me whether Reverse Charge Mechanism is applicable on Fabrication Works?If Yes, at which rate.
Please tell me.

Thanks in advance.

CA Siddhartha Bhardwaj

CA Siddhartha Bhardwaj (Expert)
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15 March 2014 1. Fabrication works is covered under works contract. Accordingly service tax is applicable on the said service.

2. Service tax rate is 12.36%.

3. If the material value & labour charges are separately mentioned on the invoice, then service tax will be charged only on the labour charges.

4. If the material value & labour charges are NOT separately mentioned on the invoice, then following will be applicable:

-Pay Service Tax on 40% value of original work

-Pay Service Tax on 70% value of maintenance or repair or reconditioning or restoration or servicing of any goods

-Pay Service Tax on 60% value of all other works contract