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TMI BlogIf Material and Service bill give separateX X X X Extracts X X X X X X X X Extracts X X X X ..... Dear Sir, We are a manufacturer and we doing one ducting line for pass the smoke of our company the vendor doing this work with material and service. If the vendor will raise the bill material and labor combined then it will be attract for service tax under RCM as this vendor is proprietor. if Vendor give the bill separate bill for material and separate for labor for installation in this case it ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is attract service tax under RCM or not. and it is eligible for input credit or not ? - Reply By Rajagopalan Ranganathan - The Reply = Sir, According to Section 65 B (54) works contract means a contract wherein transfer of property in goods involved in the execution of such contract is leviable to tax as sale of goods and such contract is for the purpose of carrying out construction, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erection, commissioning, installation, completion, fitting out, repair, maintenance, renovation, alteration of any moveable or immovable property or for carrying out any other similar activity or a part thereof in relation to such property. According to rule 2 A (i) of Service Tax (Determination of Value) Rules, 2006 Value of service portion in the execution of a works contract shall be e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... quivalent to the gross amount charged for the works contract less the value of property in goods transferred in the execution of the said works contract. However, gross amount charged f or the works contract shall not include value added tax or sales tax, as the case may be, paid or payable, if any, on transfer of property in goods involved in the execution of the said works contract. OR ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Where the value has not been determined under clause ( i ), the person liable to pay tax on the service portion involved in the execution of the works contract shall determine the service tax payable in the following manner, namely:- (A) in case of works contracts entered into for execution of original works, service tax shall be payable on forty per cent. of the total amount charged for the wo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rks contract; 2 [(B) in case of works contract, not covered under sub-clause (A), including works contract entered into for,- (i) maintenance or repair or reconditioning or restoration or servicing of any goods; or (ii) maintenance or repair or completion and finishing services such as glazing or plastering or floor and wall tiling or installation of electrical fittings of immovable prop ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erty, service tax shall be payable on seventy per cent. of the total amount charged for the works contract. Therefore, in my opinion, if the service provider issues a combined bill for supply of material and service provided and since you are constructing a new duct for passing of smoke you are liable to pay service tax on 40% of the total amount charged for the works contract. If the con ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tractor issues separate bills for material and service provided then you have to service tax @14% on the value of service provided. - Reply By Ganeshan Kalyani - The Reply = If two separate bill is issued by the contractor then the contractor should charge full service tax on service bill. and he should charge VAT on material bill. - Reply By ashish chaudhary - The Reply = Separation of consi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... deration between material and service does not change the character of transaction and it continues to be of works contract (it otherwise it is.) This is only one of the method of valuation under service tax and VAT laws. In my view, there is still liability under RCM on labour charges. - Reply By KASTURI SETHI - The Reply = Bizarre case. Why two bills ? Modus operandi of the contractor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ? Own creation as per contractor's whims ? Status of providing service with material cannot be changed by vivisecting the bill into two parts. After analyzing pros and cons of the situation viz-a.viz statutory provisions, I fully agree with reply dated 9.11.2015 of Sh. Ashish Chaudhary. - If Material and Service bill give separate - Query Started By: - Swapneswar muduli Dated:- 8-11- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2015 Service Tax - Got 4 Replies - Service Tax - Discussion Forum - Knowledge Sharing, reply post by an expert, personal opinion Tax Management India - taxmanagementindia - taxmanagement - taxmanagementindia.com - TMI - TaxTMI - TMITax ..... X X X X Extracts X X X X X X X X Extracts X X X X
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