Service tax on contract value

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

02 October 2016 Dear Sir
I am a contractor providing works to KSEB Ltd (Kerala Electricity). Here materials are supplied by KSEB and the construction of Electical Line,or its Repairs etc are done by me with my labourers.
My query is that , whether I have to Pay Service Tax on these type of contract works.

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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02 October 2016 This contract will be treated as works contract and service tax applicable on labour portion. If you are not a company then 50% of applicable service tax payable under RCM by KSEB Ltd. and you have to pay 50% of applicable service tax.

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Querist : Anonymous

Querist : Anonymous (Querist)

02 October 2016 Dear sir we are providing labour portion only, the materials are provided by the company.. then also it comes under Works Contract?
Distribution of Electricity Comes under Negative List, can these works can be catogarised under such list.?

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CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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03 October 2016 As the material is involved in your works it is a works contract who supply the material is irrelevant.
This work will not fall under Negative list category of distribution of elecricity. The distribution services provided by KSEB is only exempted.

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Bhaskaran Chackrapani Warrier

Bhaskaran Chackrapani Warrier (Expert)
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03 October 2016 Seetharaman Sir

Gross value of service under works contract includes value of materials supplied free of cost by the awarder. Notification 32/2007 dt 22.5.2007 as amended w.e.f . 07-07-2009.

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CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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03 October 2016 Yes you are right.sir, for the purpose of abatement it has to be included. If labour portion is separately ascertainable then service tax is payable on labour portion only as per valuation Rules.

Querist : Anonymous

Querist : Anonymous (Querist)

19 October 2016 Here the agreement with the contractor is only for labour portion i.e Gross value of of contract doesn't include material value. The value of material is separately accounted by the company.

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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19 October 2016 In such a case service tax payable on gross value(labour portion) without any abatement.

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