Service tax payment

This query is : Open

Querist : Anonymous

Querist : Anonymous (Querist)

24 October 2012 Hi,

We have imported machines from China under EPCG Scheme as per our PO and payment also 100% made.

The Installation of machine done by their agent who is located in India. We have not made any payment towards installation of machine to their agent. now excise auditor requested us to make service tax payment on installation of machine.

is that liable to pay Service Tax on installation of machine by us? whether can it be avoided ? Kindly clarify.

Sanjiv Dandona

Sanjiv Dandona (Expert)
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24 October 2012
Please clarify the following:

a) Please elaborate the terms of contract with the Machinery Supplier. Is it that under the contract they were supposed to install the machinery at your premises the the cost of installation was included in the cost of machinery.

b) On what value has the excise auditor asked you to pay service tax. Obviously it cannot be on the total value. Has he determined the Service Portion.

c) Are you aware whether the Agent who installed this machinery is entitled to Service or any other charges in this respect from the Principal.

We will examine this after getting replies to the above