Valuation of works contract in service tax

Hello Friends,

You are all aware of the paradigm changes made in Service Tax Regim from 01.07.2012 onward upon introduction of Negative List , widening the scope of Reverse Charge and Change in defination of Works Contract and Valuation Rules.

I am here inviting your valuable comments on Determination of Value of Works Contract under new provisions.

 For Determing Service Portion in execution of Works Contract Specified % of abatement(40/60/30)  will be allowd on "Total Amount" and As per Rule 2A (d) " Total Amount" of Notification No. 24/2012 Service Tax ,(Determination of Value Rules, 2012)- "Total Amount" includes- "Fair Market Value of all goods and service supplied in or in execution of works contract"

Now the question arise what will be considered as goods or service supplied?

For Example if the service(which involves some material of service provider and hence becomes works contract service) is done on material purchared by the company whether the value of material purchased by the company will be added to the amount paid to the service provider for arriving at the "Total Amount"?

Please post your views.

Regards,

CA Vaibhaw Aggarwal