Whether Service tax under RC can be charged on Amount of Repair of AC, Repair of Machinery parts etc
Ashish Jain (CA Final) (120 Points)
27 July 2016Whether Service tax under RC can be charged on Amount of Repair of AC, Repair of Machinery parts etc
CMA Poornima Madhava
(CMA)
(13112 Points)
Replied 27 July 2016
You mean ST on works contract (includes service as well as replacement of parts)? If yes, partial reverse charge is applicable. Service provider is required to pay 50% of ST and the service receiver to pay balance 50% on reverse charge basis.
Ashish Jain
(CA Final)
(120 Points)
Replied 27 July 2016
My q is on Manpower Supply, not on Work Contract
CMA Poornima Madhava
(CMA)
(13112 Points)
Replied 27 July 2016
But your query is regarding repair of AC/machinery etc which clearly falls under the definition of works contract (if service and goods are involved). If you mean manpower supply, then service recipient is required to pay 100% ST on reverse charge basis provided the service is provided by an individual/HUF/Firm/AOP, located in a taxable territory to a business entity registered as body corporate located in a taxable territory.
Ashish Jain
(CA Final)
(120 Points)
Replied 27 July 2016
In Work Contract Service Material + Labour are required, but in Manpower Supply only service is required.
in my query we are only receiving repair service, not goods purchased. That,s why 100% RC would be levied
CMA Poornima Madhava
(CMA)
(13112 Points)
Replied 27 July 2016
Service of AC/machinery does not fall under the category of manpower supply. For definition of manpower supply: /forum/analysis-of-reverse-charge-mechanism-for-manpower-supply-services-or-security-services-328869.asp
In your case, it is just service of machinery etc without involvement of goods. Hence no reverse charge is applicable for the service recipient. However, service provider is required to levy ST if no exemption is applicable.
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