Service Tax on Painting Contract.

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..... Service Tax on Painting Contract.
Query (Issue) Started By: - THYAGARAJAN KALYANASUNDARAM Dated:- 5-4-2017 Last Reply Date:- 6-4-2017 Service Tax
Got 5 Replies
Service Tax
Dear Expert, One of our customer is executing the painting works contract, we would like to know whether we should take the value of the contract 40% as original work (or) 70% as finishing service. Thanks in advan .....

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..... ce. Reply By KASTURI SETHI: The Reply: 70 %. If pure labour 100% liability is on contractor.No benefit of service portion. No RCM in such situation of pure labour. To reap benefit of RCM, other conditions have to be qualified. Reply By Rajagopalan Ranganathan: The Reply: Sir, As per rule 2A (ii) (A) and (B) of Service Tax (Determination of Value) Rules, 2006, (A) in case of works contracts .....

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..... entered into for execution of original works, service tax shall be payable on forty per cent. of the total amount charged for the works contract. (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 finish .....

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..... ing services such as glazing or plastering or floor and wall tiling or installation of electrical fittings of immovable property, service tax shall be payable on seventy per cent. of the total amount charged for the works contract. Reply By Ganeshan Kalyani: The Reply: Painting work is covered under finishing work which is other than original works contract service. Therefore, service tax is p .....

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..... ayable on 70% of value of contract. I agree with both the experts Sri Kasturi Sir and Sri Rajagopalan Sir. If pure Labour service is rendered by the contractor then full service tax is liable to be properly charged on the invoice, collected and paid to the government. In such case, small scale exemption can be availed by the contractor rendering pure service. Thanks. Reply By Ganeshan Kalyan .....

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..... i: The Reply: Please read "by the contractor " in continuation to second para of my previous reply. Reply By Himansu Sha: The Reply: Seventy percent.
Discussion Forum - Knowledge Sharing .....

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