Works contract

This query is : Open

Dhaval soni (Querist)
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08 September 2012 If the vendor is providing the service of replacement of various machinery,which includes material as well as service, and if he is charging 12.36 % service tax then in this case whether its works contract and whether we are liable to bear 50% under reverse mechanism

CA Suresh Jain

CA Suresh Jain (Expert)
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09 September 2012 1. The replacement of machinery is not a works contract as per the definition of works contract u/s. 65B
2. In view of the above the vendor should charge service tax @12.36% on the service portion and you are not liable to pay service tax under RCM

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