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Abatement on erection, commissioning and installation

Babu P (Student) (85 Points)

20 October 2013

Dear all

Please clarify what is the abatement rate for original work carried under service category (Erection, Commissioning and Installation) after 1-7-2012

whether 67% or 60% and also please give the notification number.

Thanks in Advance.

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CA VIRAL SANGHVI (Finance head) (681 Points)
Replied 21 October 2013

Notification No. 24/2012-service tax,

In case of original work pay service tax on 40 % of value

In case of maintenance or repair or reconditioning or restoration or servicing of any goods pay service tax on 70 % of value

In case of all other works contract pay service tax on 60 % value

and pay works contract tax on the whole amount excluding service tax if the amount is greater than 1 cr.

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Babu P (Student) (85 Points)
Replied 21 October 2013

Thank you very much sir

CA Yogesh Chawla (Chartered Accountant) (137 Points)
Replied 27 November 2013

Notification no. 24/2012-ST provides service valuation rules only related to Work Contract Service as mentioned above. Such cannot be called as abatements and also they do not apply to Erection, Commissioning and Installation Service as there is no transfer of property involved . There is no abatement prescribed for Erection, Commissioning and Installation Service.