Clarification for diff between mantenance or repair service

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deepakkumarsingh (Querist)
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21 July 2012 Dear Sir/ Madam

we are requesting you to pls Clarify the following Points.

Pls note that we are a Trading in industrial Products and also doing Labour Job for this we have registered in Service Tax in the following heads:-

1.Maintenance or Repair Services
we are doing Maintenance or Repair service in Pipe Line job, Repair of & Motors, Pumps Jointing of Pipe, bend, ,tee, etc.and in the repairing we are also supplying Pipe, Bend fittings

2. Erection commissioning & Installation
we are doing Installation of Pump, Motor , Base frame , Laying of Pipe , Installation of Turvbo Ventilators also supply the Material.

Pls Note that we have received the Work Order for above services in which Material & Service portion mentioned seperatly by Item Code and we are also billing Separate Invoice (a) Service Invoice for service Portion with Sr. tax Charge & (b) Tax Invoice For Material Supply & Tax deposited to the State Gov. but Not Charge to customer

3.Goods Transport Agency
Service Tax on freight paid by us for Purching of goods for Trading from out side or inside the state

Our Quaires

1. What is the diff. between Works Contract vs Maintenance or Repaire Services and Erection commissioning & Installation.
2. Threse is seperat Head of Works Contratot ,Maintenance or Repaire Services and Erection commissioning & Installation as per Service Tax rule if Seperate pls clarify in wich Category we are Covered.

3.New Sr. Tax Reule "Reveres Charge Mechanisum is applicable for us or Not. If applicalable the what is the process of billing Deposition of Sr. Tax & Filing of return.

4. Have any Change in Sr. Tax Rulr for Category Repar maintaenance of Plant & Machineries from 01-07-2012 if any changes pls provide us Notification. pls note that we have received Pumps from our client for repairing we have give them Qtn. for Repairing of Pumps But they says us " Pls Confirm as per new service tax rule w.ef 01-07-2012 the service tax on this category wii be @12.36% on 70% of total amount for job. and also mention material content for WCT(if any) for this Job."

5.In GTA presently we have paid the service ax on Freight after Payment of Freight it Correct or Not. (in this matter Some times we have Paid the freight too late due to dispute and Sr. tax paid after the solve the problem & freight paid.)

Rgds
Deepak

RENGARAJ R.K

RENGARAJ R.K (Expert)
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21 July 2012 1. Old maintenance and repair services are now brought under works contract where 70% of the total bill value is taxable for service tax. Erection commissioning and installation also, if both material and labour is involved, you have to choose only works contract. The following are new definition and abatement permitted for works contract services both for civil and goods.
Where works contract is for… Value of the service portion shall be…
(i) execution of original works forty per cent of the total amount charged for the works contract
ii)
In case of works contract entered into for maintenance or repair or reconditioning or restoration or servicing of any goods (Thus, activities relating to immovable property are not covered)
70% of the total amount charged for the works contract
iii)
Other works contract not covered by (i), or (ii), above including maintenance, repair, completion and finishing services such as glazing, plastering, floor and wall tiling, installation of electrical fittings of an immovable property
60% of the total amount charged for the works contract
2) There is no separate heading for repairs and installation, as replied in answer no.1
3) Under reverse charge mechanism service tax is payable by you, being service receiver, and pay for 25% after deducting 75% abatement. Pay this tax in a separate challan and in the ST 3 return you have to show the full value in the total turnover and show 25% in the taxable turnover.
4) yes, 12.36% on 70% of the bill value
5) Please see the point of taxation rule for payment of service tax for belated settlement. In my opinion, pay the service tax after settlement.