whether cladding work come under the definition of works contract ? Will notification no.24/2012 be applicable to this type of contract? and is there any change in applicability of the above provisions, if the service provider obtains material bill from suppliers in the name of Service receiver and Service receiver initiates direct payment to material suppliers...
20 September 2013
The cladding service is a Works Contract service valuation has to be as per Service Tax (Determination of Value) Rules as amended by 24/2012.
If material is purchased and cost is directly paid by the recipient of the service then the service shall be that of purely a labour work and not a works contract.
disclaimer- all answers are given as per the facts narrated by you. Answer may differ after study of full facts/statements/agreements etc. involved in the case
in our case, the contract amount was 19 lakhs. out of which the service provider gave a direct material invoice of Rs. 2 lakhs only. My doubt is whether to apply the notification on entire amount of 19 lakhs or 17 lakhs
In this case, the contract amount was 19 lakhs. The service provider gave the company a material bill of Rs. 2 lakhs invoiced in the name of company. My doubt is whether to apply the computation on entire 19 lakhs or on 17 lakhs (19-2) (by applying ntftn 24/2012
21 September 2013
If it is a purely Labour contract the the Valuation on the basis on works contract is not at all applicable. You need not pay any service tax under RCM.
disclaimer- all answers are given as per the facts narrated by you. Answer may differ after study of full facts/statements/agreements etc. involved in the case
CAclubindia
