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service tax on installation charges received

CA.kaya (Chartered accountant) (3990 Points)

12 July 2010

hi

i wanted to know what and all installation charges received comes under service tax purpose? can you plz give circulars and example

thank youso much frdz

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16 Replies

Prasad R (CA Final) (2128 Points)
Replied 12 July 2010

HI Kaya,

here is the text from the finance act

According to section 65(105)(zzd) "taxable service" means any service provided or to be provided to any person, by a erection, commissioning and installation agency in relation to commissioning and installation;

65(39a)“erection, commissioning or installation” means any service provided by a commissioning and installation agency, in relation to,—

(i) erection, commissioning or installation of plant, “machinery, equipment or structures, whether pre-fabricated or otherwise” or

(ii) installation of—

(a) electrical and electronic devices, including wirings or fittings therefor; or

(b) plumbing, drain laying or other installations for transport of fluids; or

(d) thermal insulation, sound insulation, fire proofing or water proofing; or

(e) lift and escalator, fire escape staircases or travelators; or

(f) such other similar services;

For circulars,case laws and other details refer this link below

https://servicetaxonline.com/content.php?id=178#Scope

Hope this should serve ur purpose.

Regards

Prasad R

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santhosh (Student) (1174 Points)
Replied 12 July 2010

Ya... Mr Prasad is rit.....

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shakeel Ahmed (CA Final & CS Final Student) (128 Points)
Replied 12 July 2010

Erection, Installation & Commissioning

Definitions

"Commissioning and Installation Agency"means any agency providing service in relation to commissioning or installation, [Section 65(29)]

"Erection, Commissioning or Installation" means any service provided by a commissioning and installation agency in relation to erection, commissioning or installation of plant, machinery or equipment, [Section 65 (39a)]

Cir.No. 79/9/2004-ST, Date: 13/5/2004

I am directed to draw attention to the Circular No. 49/11/2002 –S.T., dated 18/12/2002, whereby it is clarified that the work of Erection and Commissioning is in the nature of services provided by a “Consulting Engineer” and hance taxable under Service Tax. Also in the year 2003 dated 20^thJune 2003, issued from File No. B-3/7/2003-tru, IT Was clarified that charges for erection of plant would not be covered under the Commissioning and Installation services.

In the light of above conflicting views, several representation have been received in the Board for clarification as to whether

the charges for erection would be covered under Services Tax or not?
the Commissioning or Installation services would be covered under Service Tax under Consulting Engineer service effective from 7/7/1997?
The issue has been examined by the Board in consultation with the Ministryn of Law and Justice and in this regard I am directed to say that charges for erection installation & commissioning are not covered under the category of Consulting Engineer Services. Commissioning or Installation service will be separately taxable under relevant entry and are not chargeable under Consulting Engineer Services. Accordingly, the clarification issued vide the Circular No. 49/11/2002-S.T. dated 18/12/2002 stands modified to this extent.

regards,

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CA. ANiRuDDhA RAthi (CA) (554 Points)
Replied 12 July 2010

section 65 (105) "taxable service" means any service provided or to be provided to any person, by a erection, commissioning and installation agency in relation to commissioning and installation;

Thanks

Regards

Aniruddha

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CA Shiv (Business Controller) (2987 Points)
Replied 12 July 2010

Yes kaya, all the above have given the write explanation..... it will be counted as service for service tax purpose.... kindly let us know what is the exact service about...

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@@@@P$$$$ (CA final student) (244 Points)
Replied 13 July 2010

agree with shakeel ahmed and prasad R.

CA SURENDRA KUMAR RAKHECHA (Practising CA at Surat) (26263 Points)
Replied 13 July 2010

The concept behind service tax is to levy service tax on each and every service until it is specifically exempted explained in the Act itself or by certain notifications if it is deemed necessary according to the changed circumstances.

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