Work contract service

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

23 January 2013 We would like to seek your opinion in the following case :-
“If a work order is awarded for electrical repair work – to an individual, comprising purely labour charges say Rs.1000/- (material has been provided by the Service Receiver) and in the other part for supply and labour charges say Rs.2000/-. In this case, Work Contract Service will be applicable on the second part only or the entire bill.

Service Receiver would be liable to pay 50% of the service tax i.e.,70% of 2000*12.36% .

Jayant Bothra

Jayant Bothra (Expert)
Follow

23 January 2013 Dear Sir,

If the work is purely labour intensive and no material is supplied by the service provider then the service will fall under"Erection , commissioning & installation service" and not under work contract.
Now, to your second question, if the material supplied by him is liable to vat then only it is eligible to called as work contract. If he is not charging VAT then it is not a work contact it is again "Erection, commissioning & installation service".

Thanks & Regds

CA JAYANT BOTHRA
M: 9911-550-210