Applicability of Works Contract scheme, Service Tax

[t.sundaram]

Annual maintanence of Air condition units which consists of 50% labor and 50% supply of spares. Whether this can be treated as WORKS CONTRACT and can opt for composition and can collect and pay service tax @ 4%

Posts / Replies

[Rama Krishana]

Management, maintenance and repair service is not included within the scope of works contract service. Therefore, you can not avail the benefit of composite rate of service tax in respect of AMC contract including material. However, you can claim deduction of material supplied in respect of AMC under notification 12/2003 subject to certain conditions. Moreover, if you are paying VAT on the AMC or part of AMC, you may claim exemption upto that amount. You may refer a recent decision - as 2009 -TMI - 32871 - CESTAT, BANGALORE