Service tax on maintenance

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

21 July 2016 Hi All,

Small query regarding service tax on maintenance works.

Our company gave maintenance work of a machine to a contractor, in which the contractor provides only labour and the material will be supplied by us. In this case is it required charge service tax under reverse charge @ 70% under works contract as per Rule 2 A.

CA AJAY KUMAR AGRAWAL

CA AJAY KUMAR AGRAWAL (Expert)
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21 July 2016 In case item issued for such maintenance is directly debited to Repair A/c then only TDS is applicable on Service Charges & contractor will charge Service Tax (if eligible) & you can take Cenvat Credit of the same. In case you debit the material to contractor account, then it will be come complicated & Service Tax will be applicable under Works Contract Tax (under Declared Services)

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Querist : Anonymous

Querist : Anonymous (Querist)

21 July 2016 Thanks for the quick response CA Ajay Sir. In case our company is not issuing any materials and they(contractors) did service for machinery using electrodes,in that case also can we take the same stand and can ignore the ST under reverse charge

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CA AJAY KUMAR AGRAWAL

CA AJAY KUMAR AGRAWAL (Expert)
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21 July 2016 While doing maintenance work some items/inputs may be used by contractor like oil, cotton, electrodes, nut bolts, minor parts etc. The contractor should raise bill only for labour charges to enable you to be liable for TDS only.

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