Go AD-FREE with CAclubindia Pro and Daily WhatsApp Updates. Subscribe Now!

Construction or work contract service

259 views 1 replies

Sivaraman A R

1044 Points Joined January 2009

Everywhere I am reading that if there is transfer of property in goods involved in excecution of a contract, it will be called as Works contract.

If there is no material element, it can be treated as construction service.

On reading what is construction service, from the attached file , I am not able to understand which construction service is there with no material element. There is no construction service without material element

Can you please advise me with example the types of construction services which are not work contract service.

Attached File : 131620 20151012001902 construction serv versus work contract.pdf downloaded: 107 times

Replies (1)

Karthik.V.Kulkarni

Chartered Accountant

594 Points Joined December 2012

The esscence of works contract is where there is a transfer of property in goods. But those goods must be leviable to tax as sale of goods i.e vat. In construction service there is no such tax leviable as it is used for construction. Though materials are used in construction also the final product is not leviable to tax as sale of goods but in case of worka contract it is.