• Nov
  • 05
  • 2012

Service Tax On Works Contract – Exemptions – After 01-07-2012

Article ID 53464 | Posted In Service Tax | , | 98 Comments » Print Friendly and PDF

Amit Mundhra, FCA, ISA(ICAI)

Service tax provisions in respect to “Works Contracts” have undergone major changes after introduction of new service tax regime. Works contract in itself is a very lengthy subject and law relating to Works Contract in Service Tax is available in a very scattered way. I am trying to summarize all the legal provisions relating to Works Contract in this new service tax regime in a series of articles. This article is the first one in the series.

Following points are covered in this article.

  • Definition of Works Contract
  • Works Contract as Declared Services
  • Works contract in Negative List
  • Works contract in Mega Exemption Notification.

DEFINITION OF WORKS CONTRACT

Section 65B(54) defines “Works Contract” as

“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, erection, commissioning, installation, completion, fitting out, repair, maintenance, renovation, alteration of any movable or immovable property or for carrying out any other similar activity or a part thereof in relation to such property”

There are 2 parts of this definition

  1. A contract where transfer of property in goods involved is leviable to tax as sale of goods, AND
  1. Such contract is for carrying out certain specified activities in relation to Movable Or Immovable property.

By this definition, the scope of “Works Contract” has been vastly increased by inclusion of “Movable Property” in the definition. Earlier, service tax works contract is restricted to construction related activities, but now all kinds of works contract activity is liable to be taxed under Service Tax.

INCLUSION OF “WORKS CONTRACT” IN DECLARED SERVICES

Works contract is also included in the “Declared Service” under section 66E, which states as under

Section 66E : Declared Services

“The following shall constitute declared services, namely ………

(h)        Service portion in the execution of a works contract.”

By this inclusion, the service portion in a works contract has become taxable under the Service Tax provisions.

“WORKS CONTRACT” IN NEGATIVE LIST OF SERVICES

Though, “Works Contract” is not expressly found in Section 66D “Negative List of Services” but there is one indirect reference to “Works Contract”.

Following is the sub clause (a) of Section 66D.

(a)    Services by Government or a local authority excluding the following services to the extent they are not covered elsewhere-

(i)……. (ii)……. (iii) ……….

(iv)       Support services, other than services covered under clauses (i) to (iii) above, provided to business entities.

Here services provided by Government or a Local Authority is included in negative list but there is exclusion related to Support Services.

What is a “Support Services”

Section 65B defines “Support Services” as follows.

“Support services” means infrastructural, operational, administrative, logistic, marketing or any other support of any kind comprising functions that entities carry out in ordinary course of operations themselves but may obtain as services by outsourcing from others for any reason whatsoever and shall include advertisement and promotion, construction or Works Contract, renting of immovable property, security, testing and analysis.”

The whole text above means that if Government or a Local authority is providing Works Contract Service to any Business Entity, then it will be taxable.

Though, I could not think of any practical example of this case where Government or Local authority is doing any works contract for anyone. So in my view, practically “Works Contract” is not in Negative List of Services.

“WORKS CONTRACT” IN EXEMPTION NOTIFICATIONS

Service tax Notification No. 25/2012 dated 20.06.2012 covers all the exemptions available under the Service tax provisions. Point number 12, 13, 14, 25 and 29(h) covers the exemption related to Works Contract. I am trying to summarize the exemptions related to “Works Contract” in a simple way.

POINT NO. 12 OF MEGA EXEMPTION NOTIFICATION

Services Provided TO

 

Government – Local Authority or Governmental Authority

 

By Way of

 

Construction – Erection – Commissioning – Installation – Completion – Fitting out – Repairs – Maintenance – Renovation – Alteration

OF

 

(a)                A Civil Structure or other original works, meant for use other than for commerce, industry, or any other business or profession.

 

(b)               A historical monument / archaeological site, or remains of national importance, archaeological excavation or antiquity specified under the Archaeological Act, 1958.

 

(c)                A structure meant predominantly for use as Educational, clinical, art or cultural establishment.

 

(d)               Canal, dam or other irrigation works.

 

(e)                Pipeline, conduit or plant for (i) water supply (ii) water treatment or, (iii) sewerage treatment or disposal

 

(f)                A residential complex meant for self use or for use of their employees or other persons specified in explanation 1 of section 65B(44).

 

 Important Points in point no. 12 :

1.      Service Receiver based exemption:

For claiming exemption under this point, Service receiver must be Government, Local Authority or Governmental Authority. If the service receiver is not Government, Local Authority or Governmental Authority then this exemption is not available.

2.      Relevant Definitions under point No. 12

Following are the relevant Definitions under this point.

Term Definition
Government Government is neither defined in this notification nor in the Finance Act. As per section 3(23) of General Clauses Act,“Government” includes Central Government and State Government.

 

Local Authority As per Section 65B(31) of the Finance Act “Local Authority” means;(a)   A panchayat as referred to in clause (d) of article 243 of the constitution.(b)   A municipality as referred to in clause (e) of article 243P of the constitution.

(c)    A municipal committee and a district board, legal entitled to, or entrusted by the government with, the control or management of a municipal or local fund;

(d)   A cantonment board as defined in section 3 of the Cantonments Act, 2006

(e)    A regional council or a district council constituted under the Sixth Schedule to the constitution.

(f)     A development board constituted under article 371 of the constitution.

(g)   A regional council constituted under article 371a of the constitution

 

Governmental Authority As per Notification No. 25/2012 dated 20.06.2012 “Governmental Authority” means;A board, or an authority or any other body established with 90% or more participation by way or equity or control by government and set up by an act of the Parliament or a State Legislature to carry out any function entrusted to a municipality under article 243W of the Constitution.
Original Works As per definition given in “Service Tax (Determination of Value) Rules 2006, “Original Works” means;        i.            All new constructions; or

      ii.            All types of additions and alterations to abandoned or damaged structures on land that are required to make them workable.

iii.            Erection, commissioning or installation of plant, machinery or equipment or structure, whether pre-fabricated or otherwise.

Residential Complex As per Section 65B(24) of the Finance Act, “Residential Complex” meansAny complex comprising of a building or buildings, having more than one single residential unit.
Other Persons specified in Explanation to Clause 44 to Section 65B of Finance Act Explanation to clause 44 of section 65B of the finance act.1.      Members of parliament, members of state legislative assembly, members of panchayats, members of municipalities and members of other local authorities
2.      Any person who holds any post in pursuance of the provisions of the constitution in that capacity
3. Any person as a chairperson or a member or a director in a body established by the central government or state governments or local authority and who is not deemed as an employee before commencement of this section.

 POINT NO. 13 OF MEGA EXEMPTION NOTIFICATION

Services Provided

 

By Way of

 

Construction – Erection – Commissioning – Installation – Completion – Fitting out – Repairs – Maintenance – Renovation – Alteration

OF

 

(a)                A road, bridge, tunnel, or terminal for road transportation for use by general public.

 

(b)               A civil structure or any other original works pertaining to a scheme under Jawaharlal Nehru National Urban Renewal Mission or Rajiv Awaaas Yojna.

 

(c)                A building owned by an entity registered under section 12AA of the Income tax act, 1961 and meant predominantly for religious use by general public.

 

(d)               A pollution control or effluent treatment plant, except located as a part of a factory; or a structure meant for funeral, burial or cremation of deceased;

 

 Important Points in Point No. 13:

1.      Status of Service Receiver is not important

Under this point, the status of Service receiver is not important. Only the specified services are eligible for exemption.

2.      Relevant Definitions under Point 13

Following are the relevant Definitions under this point other than already discussed in point no. 12.

Term Definition
General Public As per Notification no. 25/2012 dated 20.06.2012 “General Public” means;The body of people at large sufficiently defined by some common quality of public or impersonal nature.

 

 POINT NO. 14 OF MEGA EXEMPTION NOTIFICATION

Services Provided

 

By Way of

 

Construction – Erection – Commissioning – Installation –

 

of

 

Original works

Pertaining To

 

(a)                Airport, port or railways, including monorail or metro,

 

(b)               Single residential unit otherwise as a part of a residential complex,

 

(c)                Low cost houses up to a Carpet Area of 60 square meters per house in a housing project approved by competent authority empowered under the “Scheme of Affordable Housing in Partnership” framed by the Ministry of Housing and Urban Poverty Alleviation, Government of India,

 

(d)               Post harvest storage infrastructure for agricultural produce including a cold storage for such purposes; or

 

(e)                Mechanized food grain handling system, machinery or equipment for units processing agricultural produce as food stuff excluding alcoholic beverages

 Important Points in Point no. 14:

1.      Status of Service Receiver is not important

Under this point, the status of Service receiver is not important. Only the specified services are eligible for exemption.

2.      Some activities omitted

In these point activities of Completion – Fitting out – Repairs – Maintenance – Renovation – Alteration has been omitted as compared to point no. 12 & 13. This omission is worth giving attention.

3.      Relevant Definitions under Point 14

Following are the relevant Definitions under this point other than already discussed in point no. 12.

Term Definition
Single Residential Unit As per Notification no. 12/2012 dated 17.03.2012 “Single Residential Unit” means;An independent residential unit with specific facilities for living, cooking and sanitary requirements.

 POINT NO. 25 OF MEGA EXEMPTION NOTIFICATION

Services Provided TO

 

Government – Local Authority or Governmental Authority

 

 

By Way of

 

(a)                Carrying out any activity in relation to any function ordinarily entrusted to a municipality in relation to water supply, public health, sanitation conservancy, solid waste management or slum improvement and up gradation; or

(b)               Repair or maintenance of a vessel or an aircraft.

 Important Points in point no. 25 :

1.      Service Receiver based exemption:

For claiming exemption under this point, Service receiver must be Government, Local Authority or Governmental Authority. If the service receiver is not Government, Local Authority or Governmental Authority then this exemption is not available.

POINT NO. 29(h) OF MEGA EXEMPTION NOTIFICATION

Sub Contractor

 

Providing Services

 

 

By Way of

 

Works contract to another contractor providing works contract services which are exempt.

 

 

 Important Points in point no. 29(h) :

1.      Only sub contractor providing works contract service is exempt:

For claiming exemption under this point, Sub Contractor providing services by way of Works contract is exempt. If sub contractor is providing services other than works contract, then exemption is not available

Exemption from Service Tax is a very important subject. It is to dealt with utmost care and after understanding the true intention of the legislature to avoid any legal complications.

Amit Mundhra FCA

Author is a Fellow member of the ICAI and he can be reached at amit.mundhra@gmail.com


  • Ashok N Bhurani

    Can interior decorators fall under works contract service under service tax

  • Palav

    We are registered mechanized cleaning contractor western Railway, whether we Are exempted from Service tax or not. Kindly send or give us clarification as we r doing works contracts under mechanized cleaning , maintenance and up keeping , sweeping , rag picking , public area cleaning in railway stations and if applicable how many percent service tax applicable? my mobile no. is 09974020586…. thanx

  • Palav

    We are registered mechanized cleaning contractor western Railway, whether we Are exempted from Service tax or not. Kindly send or give us clarification as we r doing works contracts under mechanized cleaning , maintenance and up keeping , sweeping , rag picking , public area cleaning in railway stations and if applicable how many percent service tax applicable? my mobile no. is 09974020586…. thanx

    • Debasis Bhuyan

      POINT NO. 13 OF MEGA EXEMPTION NOTIFICATION

      Services Provided

      By Way of

      Construction – Erection – Commissioning – Installation – Completion – Fitting out – Repairs – Maintenance – Renovation – Alteration

      OF

      (a) A road, bridge, tunnel, or terminal for road transportation for use by general public.

      (b) A civil structure or any other original works pertaining to a scheme under Jawaharlal Nehru National Urban Renewal Mission or Rajiv Awaaas Yojna.

      (c) A building owned by an entity registered under section 12AA of the Income tax act, 1961 and meant predominantly for religious use by general public.

      (d) A pollution control or effluent treatment plant, except located as a part of a factory; or a structure meant for funeral, burial or cremation of deceased;

      • Debasis Bhuyan

        POINT NO. 14 OF MEGA EXEMPTION NOTIFICATION

        Services Provided

        By Way of

        Construction – Erection – Commissioning – Installation –

        of

        Original works

        Pertaining To

        (a) Airport, port or railways, including monorail or metro,

        (b) Single residential unit otherwise as a part of a residential complex,

        (c) Low cost houses up to a Carpet Area of 60 square meters per house in a housing project approved by competent authority empowered under the “Scheme of Affordable Housing in Partnership” framed by the Ministry of Housing and Urban Poverty Alleviation, Government of India,

        (d) Post harvest storage infrastructure for agricultural produce including a cold storage for such purposes; or

        (e) Mechanized food grain handling system, machinery or equipment for units processing agricultural produce as food stuff excluding alcoholic beverages

  • S B SHAH

    Dear sir, My client is A class Electrical contractor and started Govt contracts with Local Authority like Muncipality, Other State Govt body like PWD etc. It takes all type electrical project work,electrical installation work ,electrical maint. and operation work,and main power supply work in rly department like (1)main work is operation & maintenance of street light (2) supply & erection of street light fittings (3) Distribution & transmission work.
    Your earliest reply in this matter is highly appreciable. Thanking you in anticipation.

    • rajender singh

      Dear Sir, we are engaged in providing service to power grid corp., which is a central transmission and distribution utility, for repair of electrical transmission lines.
      According to Negative List of service tax Section 66D (K), TRANSMISSION AND DISTRIBUTION OF ELECTRICITY BY AN TRANSMISSION AND DISTRIBUTION UTILITY IS EXEMPTED.
      So, are we covered under service tax or not ?,
      we are doing work transmission lines ,which is exempted in service tax.
      So,please clarify it.
      Thanks in Advance and Obliged for this kind help

  • P.P. Maheshwary (

    Whether Punjab State Power Corporation Ltd is a Govermental Authority under Sevice Tax Law and rules? and as such qualifies under mega exemption 25/12 upto 31/03/2015.Please respond.

  • Pragnesh chavda

    Dear Amit Sir,
    i am doing construction work in Border security force(BSF) for residential quarter so this works comes under exemption or not….again my question is that between BSF and my company,a consultant company NBCC(National Building Construction Company) a “Govt undertaking company” working as PMC (project Management Consultancy) then this works comes in exception or not…plz reply me as early as possible

  • PUNIT AGARWAL

    Dear Sir I want to know on construction of BUILDING of ARMY PROJECTS is SERVICE TAX is liable Pl.let us know Thanks Regard!

  • Jatin shah

    Dear Sir,
    We are registered under service tax rule under management, maintenance & repair services, we are charging 100% service tax even material involved in our services, because of we taking input credit of raw material. So can we charged 100% service tax under works contract?.

  • RAJIV

    Our firm is providing services to Punjab State Power Corporation by way of labour for the execution of electrical nature works since 2012-2013. Kindly clarify whether service tax is playable by us. our annual turnover is more than 10.00 lac.

  • Vipul Acharya

    If a company is exempt under entry 29(h) and it is hiring machinery on rent and machine owner will charge service tax from the Company and services of company is exempt. How can company claim input of service tax paid for hiring machinery?

  • Dinesh

    Dear sir, we are A class Electrical contractor and started Govt contracts can you clarify which Government department are exempt from service Tax . i take a all type electrical project work,electrical installation work ,electrical maint. and operation work,and main power supply work in rly department like (1)main work is operation & maintenance of street light (2) supply & erection of street light fittings (3) Distribution & transmission work. Pls kindly it is service tax applicable or not . If applicable Iam not continue electrical works because my margin of profit is 10-12 %

  • mohan salunkhe

    Respected sir,
    I want to know about service tax liability on a contractor executing any govt building construction done on behalf of government/local authority for public utility such as liabrary, community hall, gym etc 1st june 2015, esspecially after amendment in negative list , which does not give clear picture on the above isuue
    thanking you
    yours sincearly

  • suba

    Government give services to industries that services is applicable for service tax

  • Bhushan Patil

    Dear Sir,

    May i requested that, please clarification against Service Tax eligible or not in Tata Memorial Centre against Housekeeping and Catering Services to PG Hostel.

    may please reply immediately

  • darshan

    Dear Sir,
    We are registered mechanised cleaning contractor for s.E.c. Railway and Central Railway , we Are exempted from Service tax as per kowledge . Kindly send or give us clarification as we r doing works contracts under mechanised cleaning , maintenance and upkeeping , sweeping , ragpicking , public area cleaning in railway stations and in highcourt also………. is really service tax exempted in this ares please kindly guide us sir????????
    my mobile no. is 09823115295….
    thanx

  • Pradeep

    I have taken a Consultancy work on Back to Back basis which includes Architectural, Structural & Project Management Consultancy. The original work is for Residential Project for Ministry of Defense taken by main Consultant. This work is 100% subletted to me by keeping 10% out of 100% as margin.

    However the Main Consultant has shown as Sub contractor in his records and deducting 2% TDS. Also no Service Tax was paid to me being Project work belongs to Defense Ministry.

    In this regards, I would like to request to guide me on following points:
    1. Whether the Main Consultant is exempted from Service Tax for this Project work?
    2. If so, whether I, the sub Consultant, is also exempted from ST?
    3. In case the main consultant is not exempted and liable for ST, then what will be liability of sub consultant? Is he applicable for ST for same project? Will it not be a duplicate taxation as it is 100% subcontract on back to back basis?

  • Dipankar Dutta

    Sir,I am a contractor, I provide service to Railways, am I liable to pay service tax?

  • VINOD TOSHNIWAL

    RESPECTED SIR ,

    can the construction of school building is covered in auxiliary education services . according to the circular no. 172/7/2013 st dated 19-09-2013

    it is also clarifed that in addittion to the services mentioned in the definition of “auxiliary educational services ” other examples would be hostels , housekeeping security services , canteen etc.

    can it means construction of school building covered in auxiliary service from 01-07-2012 to 10.07.2014

    clarification start words in addition to and use the words other examples —-and etc. its means illustartion may be more please advice me

  • mr amit

    I am poverding security service in ceritable truest run by education collage. I am get the payment incleciv of all lum sum no bill on tax prient what exelary education examtet please adwaij me

  • Tarun

    Dear sir
    I am gvt. Contractor having an enlistment from HARYANA URBAN DEVELOPMENT AUTHORITY
    Now i would like to ask am i liable to pay service tax to government on constructing roads….
    Your reply will helps me alot to pay service tax on time sir
    If psbl rply me at my mail choudharytarun@outlook.com

  • Mahesh Kumar

    sir, we have receiving the outsource services of sanitation in govt,/autonomous bodies of govt. of nct of delhi through contractor. Is contractor exempted from service tax. If he exempted he charge the service tax in other way i.e. lumpsump amount shown in the contract including service tax @ 12.36%. Pl reply

  • Ash

    I had entered into a contract with a builder to build a 2300 sq duplex for me. The contract was made for a lumpsum amount for construction. The house has been constructed and handed over .Now i have been told by the builder that i need to pay WCT and Service tax on the overall agreed amount. I have paid up the total agreed amount. Do I need to pay the builder the WCT and service tax amount for this construction? Please suggest

  • Dipak Sarda

    dear sir,

    we are a civil contractor, doing various civil construction work in and around east india. please guide me that under the following circumstances our works contract is coming under service tax:
    1. the work is of constructing additional area of CFS at kolkata under central warehousing corporation.
    2. the work is of new construction
    3. the CFS(cotainer frieght station) is the additional facility to port
    with regards
    dipak sarda
    s. r. associated construction co. (p) ltd.

  • DILIP CHOUDHARY

    Dear Sir,

    we are doing coating on cutting tools. For doing coating we are using materil and labour both. Shall we come under WCT in Service Tax? How to implement?

    Regards
    Dilip Choudhary
    Jamshedpur

  • s.m.khaleel

    Dear sir,
    I am electrical contractor working in S.C. Railway. Please confirm me are Service Tax are exempted in railway work or not on my email as arfaelect@gmail.com .
    Thanks

  • rupesh khachane ,vadodara

    sir.
    I ame a goverment electrical contractor. i take a all type electrical project work,electrical installation work ,electrical maint. and operation work,and main power supply work in rly department ,gujarat meritime bord,esi depart.,bsnl electric wing. i ame paid service tex only which we are receved from goverement dept. but service tex deparement clame on us 10 to 12 percent on turn over last five years.i have service no on (1)main work (2)main power supply work.in five years i have income filing 2 years audit filing,and 3 years is 8% in lum sum base. sir how we can release from service tex clame notice

  • Anurag Kamboj

    Dear sir,
    we are A class Electrical contractor ans started Govt contracts, can you clarify which Government department are exempt from service Tax ? can you provide a list or detail available on some site. we have consulted 3-4 advocates but every one has his own view, some one says that PWD is exempt ,electricity Dept is not exempt .
    other says that commercial activities are not exempt ,Hospital, colleges by PWD are exempted, Boards are not exempt ,Central Govt are exempt.
    kindly provide the right solution.

  • Krishna

    Sir
    We are the Govt. Contractor , We want to know that, We appointed the sub contractor for our work only labour and supplied the material for the work . we wants to clarify is the labour sub contractor is exempted for the service tax

  • Shan

    Dear Amit

    Would like to know what is the impact if indian contractor constructs in india on behalf of the Overseas customer and bill to him? Is it necessary that overseas customer should have the indian company by obtaining service tax registration.
    Is this reverse charge mechanism apply for the indian contractor?

  • Subrahmanyam

    Sir,

    I purchased a villa and got agreement on 25th April 2012 by paying almost 30% money and remaining was paid later as the project progress.

    Now Builder is demanding to pay 45000 as Service tax, is this really correct?

    When my registration was done on April-2012, how this is applicable to me?

    Please clarify.

    Subbu

  • JAIPRAKASH

    I have requested for suggestion on 13th oct, please reply on Bhatia@aardee.net

    thanks

  • NOUFAL

    Dear Sir,

    Please clarify – wheather WCT applicable for construction of compound wall.

  • Harisiddh Mistry

    I have to know about Service tax Work contract.

    from 2006 to 2014 Please let me know on which Ratio the service tax will be charged on BASIC VALUE and how much % of exemption will comes.

  • JAIPRAKASH

    Dear sir,

    We have taken up construction of civil works of residential complex and paying service tax on full value of contract @4.499%.

    Is service tax is exempted for our sub/labour contractors!

    If we pay service tax and excise duty for executing works contract, such amount is refunded/adjusted from our service tax payment.

    Thanks and regards

  • BABLU AGARWAL

    Sir,

    we are real estate builder of residential complex , we are giving contracts to contractor only for the work , materials is being supplied by us , in this case who is liable for serrvice tax, moreover we are private limited company.

    Recently we have done a boring wherein the contractor has done deep tube well boring but pipes are supplied by us can u plz explain we should deduct the service tax from the contractor or not if we deduct than we have to pay under reverse input theory scheme ornot. sir do help us in this regards

    plz mail us on babluagrwl@gmail.com

  • Milan Das

    If a govt agency supplies water to RBI quarters, than the Service tax is applicable on that bill or not?

  • Lopa Gogri

    Hello Sir,
    We receive work/purchase order from USA for Commissioning, installing, implementation job for a USA based company. We have provided those services in India.
    The company which provides Work/Purchase order do not have a branch in India.
    Do i have to pay SERVICE TAX for the same?Work order exceeds
    Rs 1000000/-.

  • Mahendra Dadu ,C.A.

    One of my clients, a recognised school, has outsourced software development services eg. Student record management, examination management, fee management, payroll management, etc. as Secured Access Cloud Based Automation Software.
    Pl confirm whether Service Tax is payable on this assignment by the School.
    Mahendra Dadu

  • rajesh mahajan

    Dear Amit,
    weare consucted jimkhanna club for haryana urban development authrity(HUDA)is laible to pay service tax . huda is govt body and huda devlop sector for residence purpose and conscted all amanties for facilted to the public i.e school, hospital road, sewerage treetment plant water works club etc jimkhanna club constucted not commercial purpose .huda constucted club and hand over to management on fee of cost to run the same for public .please advise us

  • Basant Bhatt

    Respected Sir,
     I’m a Goverment Electrical Contractor working for PWD RES. Uttrakhand Jal Sansthan. Goverment does not pay any Service tax to me for their services in this case I hav to pay Service tax or not. The Goverment Electrical fitting works are exempted in Service Tax department in work contact service. Please tel me as soon as possible with notification number.

    Regards,
    Basant Bhatt

  • Nand Lal

    Respected Sir,
    I am working in Rajiv Gandhi National University of Law, Punjab at Patiala. Some buildings are under construction and work stands allotted to different agencies. Some petty works are being got done from the local market which includes supply and erection/fixing etc. I shall be obliged if you could let me know : Is service tax is to be deducted from the contractors and other parties who is constructing building and doing finishing works such as wall panelling, etc. ? If yes at what rate? Thanking you

  • vijay soni

    Dear sir
    I am electrical contractor in APMC in mp &carry out the work of road lighting
    shed lighting and other related electric work like pole erracion cable laying fitting etc in mandi yard. Weather this work covered in mega exempion of service tax . APMC also registered in 12A.

  • Navpreet Singh

    dear sir, I am govt contractor and empanelled to carry out electrical works on otsourcing on labour rate basis by state electricity board. Please tell me if service tax applicable .if applicable on which basis
    thanks.

  • Mr. Suman

    Dear Sir,

    We are Works Contractors, awarded building up of a school project for which our clients are duly registered under Section 12 AA of the IT Act. Under the prevailing provisions of ST, shall we be exempted from payment of ST ???

    Looking forward for ur timely advice & guidance,

    Regards,

    Mr. Suman,
    sumanofs@yahoo.co.in

  • Vinay Kumar Agarwal

    Dear Sir,

    My TDS Deduct By FICCI under the Section 194J Fees For Professional Or Technical Services.Please suggest the position of service tax liability.

    Regards,
    Vinay Kumar Agarwal
    09548841311

  • Moolaram

    sir,we are working as sub contractor such fixing and erection of solar power plant steel structure provided by main contractor and other items including labor arranged by us.
    are we liable for services tax?
    wct is matter of sales tax or services tax?
    what is rates of wct in Rajasthan?

  • avinash chopra

    Dear sir
    I am a Govt. electrical contractor.Let me know the status of service tax after 01.07.2012.

  • Shamim C Ibrahim

    Sir,

    Regarding original work:-
    One builder has assigned a contract for flooring and aluminium fabrication of doors and windows. SIr can you please clarify whether these works comes under “original works” as defined in the notification 24/2012

  • Jagadeesh

    dear sir,

    My client maintain hotel and he provide material and paying wages to labor for repairs of the hotel walls. Then the provisions of works contract applicable?

    Please replay to this mail id as soon as possible.

    Yours faithfully

  • RAVI GOVANI

    Dear Sir,

    Mr. A was getting a tender for constricting of Taluka seva sadan under taking by Guj.Government. and He is given that tender to Mr. B and Mr. B was same project given to Mr. C so please let me clear that service tax examination or not. please reply me as soon as possible

    Regards,

    Ravi Govani

  • P.C.SAIN

    DEAR SIR,
    MY CLIENT IS TAKEN DEVELOPMENT CHARGES FROM LAND PLOT ALLOTTING .IN THIS MATTER PLEASE TELL ME IN CASE THAT SERVICE TAX IS APPLICABLE

  • sonu kumar

    Dear sir

    I m A Government Contractor .
    please tell me Street light work & poll shifting work in Exempted in service tax or not. which notification is in under

    Thanx

  • sonu kumar

    Dear sir

    I m A Government Contractor .
    please tell me Street light work & poll shifting work in Exempted in service tax or not.

    Thanx

  • sarv priya consul

    work contact services provided to a school registered under 12aa are taxable?

  • pawan bajaj

    sir i have contract of sanitation / conservancy work…..plz tell service tax is excepted for sanitation/conservancy work

  • Deendayal

    Dear Sir,
    Is steel fabrication work done on labour basis for educational institution is exempted from service tax Please clarify.

  • samar

    Dear One,

    we are a private university set up as an act passed in state legislative assembly. If you could please clarify the that if service tax will be levied on construction work orders.

    Thanks!

  • raghav

    This query is related whether any works contract like construction part which is a body of the governament of karnataka and for the agricultural university any service tax is levied if levied what is the ratio % wise for the works on gross amount of the bill payable to contractor and how the return is filed

    If any exemption for agriculture university for the atonomous body please expalain

  • ABV NAGESWARARAO

    Sir,

    Please clarify the following:

    1) Cement & Steel purchased by the company for construction of a factory shed.
    2) For constructing the factory shed, a works contract given to xyz vendor
    3) On completion of the work, vendor rising a bill for service of work
    4) Please clarify the service tax angle to pay any service on material purchased (cement & Steel )

    Thanks & Regards

    Nageswara Rao ABV

  • venkat ch

    sir,
    We are the sub contractors
    is there any exemptions of either contractor paid service tax , i know that upto 31-08-2007 any one can pay the service tax is it right or not ?

  • A G PAL

    Dear Sir, We are planning to award the digging/drilling of borewell along with installation of equipment on that well Monitoring borewells for environment assessment please advice that which type of taxes will be applicable in that case like:

    1. Service Taxif there is any exemption from service tax
    2. TDS
    3. PF
    4. Labour cessfor Rain Water Harvesting projects etc.
    5. Others

    Please revert back with positive response.

  • CA. HARISH SHARMA

    WILL SERVICE TAX APPLY ON WORK CONTRACT AWARDED BY RAJASTHAN HOUSING BORAD JAIPUR ?

  • P.C.SAIN

    service tax is applicable on construction of houses of housing board please reply as early as possible

  • Anupam Rastogi

    Dear Sir
    I am Contactor doing construction work of steel Bridge in Uttrakhand for
    Tehri hyodro devlopment corporation & Border Roads organisation.
    I want to know that these work are 100% Exempted or not.
    Please provide your views
    Thanking you

  • Sibina

    Dear Sir,

    I would like to know that does service tax is payable for sub contract work of water authority (Jappan Water Project)?

  • A.K.Shekar

    dear Sir
    A construction contractor who is building a dam for public utility for Tamilnadu Government has availed security services from us for protection of construction materials in the dam site and has provided a letter requesting us not to charge service tax.
    2) Another contractor who is constructing IT offices in government promoted SEZ is requesting security services for his construction site and wants exemtion from paying service tax.

    Please offer your valued counsel.

  • Mohd Afaque

    sir,
    I am a contractor doing civil construction work like Repairing & Maintenance , construction and Painting in FOOD CORPORATION OF INDIA (RAJASTHAN) & (GUJRAT) This department is providing services i.e.handelling & transportation of food grains including preservation .
    I want to know that ,do I have to deposit the service tax for these works or it is exempted.If exempted,then under which clause.I also want to tell you that the are not paying me the same.

    Thanks.

  • v.v.d.murali

    Dear sir,
    our company is a construction company constructed steel plant (ingot manufacturing unit)are we exempted from service tax under intermediatory service please clarify
    v.v.d.murali
    deccan_muraliyahoo.co.in

  • Habeeb

    Sir,

    We are contractors for insulation work of boiler and pipelines. We are registered under “Erection, Commissioning & Installation” with Service Tax Deptt. and charging 12.36% Ser.Tax (present rate). Work involves application of insulation purely labour and only a very small portion of consumption of material say around 3% or even less. One of our client insisted to obtain NDC (No Deduction Certificate) from Orissa Sales Tax Deptt. and the Sales Tax authorities issued NDC by authorizing our client to deduct 5% VAT(TDS) at the existing rate on 5% of total bill value {say for Rs.1,00,000/- bill (incl. Ser. Tax) VAT(TDS) be deducted on Rs.5,000/- at existing rate say 4% means Rs.200/- being VAT(TDS)}. In NDC issued by VAT Deptt. of Orissa they have mentioned the following wordings “That the above mentioned works contract involve both transfer of property in goods and labour & services. Does this have any impact of our charging bill @12.36% as per Erection, Commissioning & Installation head of Service Tax.

    Now the client is telling that he will pay service tax on 40% of gross value that too 50% of Ser.Tax and balance will have to be paid by us.

    Kindly advise me whether Ser.Tax has any relation with VAT.

  • rajat

    Dear All,

    I have a query regarding WCT applicability. The WCT rates are specified by the State Govt. to illustrate in an example: WCT rate in Delhi is 4% irrespective of the type of contract. What about the Threshold limits. Is that also with respect to States or is it based on nature of Work.

    Any help would be appreciated.

    With Regards,
    Rajat.

  • arvind kumar tripathi

    sir,
    I am a contractor doing civil construction work in UTTAR PRADESH RAJYA BHANDARAN NIGAM(U.P.STATE WAREHOUSING CORPORATION).This department is providing services as CENTRAL WAREHOUSING CORPORATION i.e.handelling & transportation of food grains including preservation for government organisations like food corporation of india,rationing & food corporation etc.
    I want to know that ,do I have to deposit the service tax for these works or it is exempted.If exempted,then under which clause.I also want to tell you that the are not paying me the same.

    Thanks.

    A.K.Tripathi

  • P.R.INDUSTRY

    Works Contractor service tax and vat percentage details

  • ashok khandelwal

    Dear Sir,

    We have entered in a contract with a company to install solar power project at Rajasthan. The company will install the solar project including material,labour,technical assistance. Some material supply by suppliers directly to company and some through the company who will install theproject. advised about WCT .

    thanks

  • diwakr

    kindly suggest about the works tax service tax on a contract value of 15 cr

  • Prithipal Singh

    Dear Sir
    I am a government contactor working with a Uttar Pradesh Developement Authority. I have constructed 100 houses with Carpet Area of 36 square meters under the Kashiram Gareeb Avas Yojna. These houses were given to BPL citizens of Uttar Pradesh free of cost. I will like to ask whether my Firm will be relieved/exempted of service tax as mentioned in no. 14 of your Article.(construction before 2012)
    Please reply me on my email i.e sbikramsmailbox@gmail.com

    Thanking You
    Prithipal Singh

  • Sharad Agarwalla

    We are coke oven contractors and providing services in the field of operation and maintenance of coke plant. We are giving this service to big industrial houses like Tata, Jindal Steel & Power ltd and many other companies.
    Now Tata is giving this as Support services and paying full Service Tax @ 12.36 %.
    JSPL is not giving any service Tax giving reference of notification 25/2012 stating this work as intermediary services and as steel is Excisable falling under mega exemption Point no 30(C)
    Jaibalaji and one more company is giving 25% of 12.36% stating manpower supply for job contract.
    Now in our case all the service receivers are steel manufacturers hence excisable and we are providing service of similar nature but Service Tax is different in all cases.
    What should be our stand and how we should file service Tax return. Can we have all different type of tax structure. Please advice

    Sharad Agarwalla

  • bb rao

    Hi All,

    Please let me know, We are handling the accounts section of a construction company, we are working GOVENMENT PROJECT OF BRIDGE WORK, and we have gaven a sub contract to other person. are we applicable for service tax or not. And sub contractor submitting the service tax bill it is applicable or not

    Please let me know on which Ratio the service tax will be charged on BASIC VALUE and how much % of exemption will comes.

  • Rahul Chopra

    Dear Sir,

    I am a civil contractor. I have a query there is a tender advertised by Haryana Tourism for Construction of Multipurpose hall on the land adjoining Gymkhana Club, HUDA at Jagadhari. The hall would be part of the Gymkhana club. Is the service tax applicable on such type of works?
    Rahul

  • surinder singh

    Sir,
    Our Institute is providing Technical education and is an autonomous body fully funded by Govt. of India. Whether Security/ Sanitation Services and other Civil/Electrical Works carried out by us through outsourcing are exempted from Service Tax or not. Please intimate the same on e-mail ID – sajjan4s@yahoo.com

    Hoping for early reply.

  • Nitin V

    Sir,
    Please let me know if the cleaning , housekeeping & security services for the housing societies is exempted from service tax? if, yes what is the supporting clause?
    As the housing societies do not come under business entity & they are non profit organization hence are the housing societies exempted from service tax?\

    Please respond to my email ID info@synergyservices.co.in
    I am looking for accounting /auditing consultant for our company.

    regards,
    Nitin Visputey
    SYNERGY SERVICES

  • Yash D Shah

    Dear Sir, We are borewell Drilling company, we undertake turn-key projects for water borewell drilling, Rain Water Harvesting, Monitoring borewells for environment assessment etc. i.e. we deal into water resources development. please advice if there is any exemption from service tax for Rain Water Harvesting projects etc. Also, I request your clarification for the follwing clause –

    3
    [(97a) “site formation and clearance, excavation and earthmoving and demolition” includes, —

    (i) drilling, boring and core extraction services for construction, geophysical,
    geological or similar purposes; or

    (ii) soil stabilization; or

    (iii) horizontal drilling for the passage of cables or drain pipes; or

    (iv) land reclamation work; or

    (v) contaminated top soil stripping work; or

    (vi) demolition and wrecking of building, structure or road,

    but does not include such services provided in relation to agriculture, irrigation, watershed development and drilling, digging, repairing,
    renovating or restoring of water sources or water bodies;]

    Please reply & oblige. Thank You!

  • Subash Chandra Kar

    Dear Sir

    We are small builder in bhubaneswar building 11 duplex in bhubaneswar on sharing basis which comprise of 3 beed room,3 toilet, one kitchen,one darwing room and one dining room.we have sold 7 plot to our customer and have started construction with agreement for construction.The rest 4 duplex with land is to be given to the landlord.i want to know about the service tax applicability ?

  • Bijay Kumar Das

    Respected Sir,

    We want to know that if in a Company, men power is supplied by a registered Contractor,whether he will liable for service tax on amount of bill raised upon Co. for supply of man power. We alos point out that Co. is paying commission to the contractor on total amount of bill raised

    Please provide us suggestions

    Thanks

  • kapil

    Dear Sir
    My client is Interior decorator can he opt above work contractor scheme.Can he eligible for input cenvat credit on materials

  • Bhaskar

    Hi All,

    We are handling the accounts section of a construction company, and the respective company’s undertaking is Works Contract. we need to charge a Service Tax on our bills.

    Please let me know on which Ratio the service tax will be charged on BASIC VALUE and how much % of exemption will comes.

  • CA ASHUTOSH SHRIVASTAVA

    Dear Amitji
    thanks for nice and deatiled presentation.
    Please elaborate term Governemntal authority as defined in Not No 25/2012 for the purpose of clause 12(f). Whether the conditions given for the term are cumulative or not.
    My client is a state government u/t. Engaged in the activity other than assigned to municipality. Please clarify that the service tax is payable for the resident quarters constructed for its employyes engaging contractors. Previsouly same is exempt as per explanation of term residential complex. pl clarify position after 1.7.2012.
    Thanks in advance

    CA Ashutosh Shrivastava

    Thanks and regards

  • ROHAN

    Hi

    I am doing washing of linen like bedsheets, towels etc used in the trains like rajdhani belonging to Indian Railways. I have a laundry where i carry out this washing work. My people also deliver this linen in the trains and remove the dirty linen from the trains ( loading and unloading )

    What is my service tax impications

    Please advice
    Regards,

    Rohan

  • Abhay Aggarwal

    In reference to the point no. 25 of the mega exemption notification what will be the status of taxability of services provided by sub-contractor which are directly passed on to the service receiver who is government authority by the principle of accretion and the main contractor has nothing more to pass.

    Please clarify.

    Regards,

    Abhay Aggarwal,
    Advocate

    9810932285

  • CA Amit Mundhra

    Dear Mr. Rajiv

    The exemption to sub contractor is only available if the works contract of the main contractor is exempt under exemption notification.

    This is a kind of umbrella provision. If main works contract is exempt, then its sub contract works contract is also exempt.

    It may be noted that only “Works contract Service” of the sub contractor is exempt under point 29(h). All other services to the main contractor will be taxable.

    CA Amit Mundhra

  • CA Amit Mundhra

    Dear Vijay Joshi,

    Yes, your observation is correct. there is no scope for services rendered to Educational institutions under the Exemption List. Point no. 13(c) covers the institutions registered u/s 12A. but there is cumulative condition that such building should be used for religious purpose by general public. Educational purpose cannot be said to be religious purpose.

    CA Amit Mundhra

  • srs

    This is with reference to the above captioned subject

    there are about 100 people those who have purchased the appartments have paid the service tax to the service tax Department through the developer in 2007-08 & 2008 – 09, based on the demand given by the developer. The developer also has deposited the service tax to the government. Later, there was a clarification through a Govt. circular that the service tax in connecting with the construction of residential complex is not applicable. Based on this service tax position prior to 1st july 2010 reg, there is a clarification which i could able to find out thru website issued by Commissioner of Central Excise, Pune-III, Trade Facility No. 1/2011, dated 15-2-2011 stating that

    With effect from 1-7-2010 (the Finance Act, 2010), an explanation has been inserted below sub-clause (zzzh) of section 65(105) to clarify that unless the entire consideration for the property is paid after the completion of construction (i.e. after issuance of completion certificate by the competent authority), the activity of construction would be deemed to be a taxable service provided by the builder/promoter/developer to the prospective buyer and the service tax would be charged accordingly .
    And he clarifies that:
    (a) Where services of construction of Residential Complex were rendered prior to 1-7-2010 no Service Tax is leviable in terms of para 3 of Boards Circular number 108/02/2009-S.T., dated 29-1-2009. The Service of Construction of Residential Complex would attract service tax from 1-7-2010. Despite no service tax liability, if any amount has been collected by the builder as “Service Tax” for Services rendered prior to 1-7-2010, the same is required to be deposited by the builder to the Service tax department. Builder can not retain the amount collected as Service Tax.
    (b) For services rendered after 1-7-2010 for which payment has been or is made after 1-7-2010, service tax is leviable and builder is liable to deposit the service tax to the service tax department. The only exception to this is provided within the parenthesis () in the “Explanation” in para 3.
    (c) For services rendered after 1-7-2010 for which payment was made prior to 1-7-2010, service tax has been exempted by the Govt. based on documentary evidence vide notification no. 36/2010-S.T., dated 28-6-2010 as amended. Therefore, this benefit can be availed by builders on the basis of documentary evidence.

    Commissioner of Central Excise, Pune-III, Trade Facility No. 1/2011, dated 15-2-2011

    In this situation where the service tax refund case stands for.

    I have made severe follow-up pn 2-3 occassions since no one ready to give any help let me know what needs to be done, to get back this service tax refund.

    Please help

    Regards

  • NSS

    Dear Mr.Amit
    WIth respect to Point NO: 29h, If you read the Point, it gives a meaning that exemption to subcontractor is available only if the service of the main contractor is exempt. Those subcontractor, who are providing service to main contractor, which is taxable, will also be subject to tax.

    Pls clarify whether i am correct.

    thanks and regards

    nss

  • Rajiv Sharma

    Dear Amit,

    Question on Reverse Charge under Works Contract – X ltd takes a construction contract from Y and sub contracts the work to Z. In this Case will X Ltd become a Service Receiver although he is actually service provider who is just sub contracting the work to Z. Please let me know your opinion.

    Regards, Rajiv Sharma

  • CA VIJAY PANDURANG JOSHI

    Dear Amit,

    Thanks for the detailed presentation!

    In one of the case a contractor is constructing a building with material for a educational institution having registered u/s.12A of the Income Tax and also registered under Public Charitable Trust Act.

    However, I am not able to find any scope in the Negative List and/or Mega Exemption Notification for the said contractor. Although the direction/logic of the negative list and/or mega exemption notification sounds to be in his favour.

    Please find out. Regards!
    CA Vijay Joshi

    • manindra prakash

      Respected Sir
      I am Govt. contractor of cantonment board and carrying out various works entrusted by the cantonment board.
      Please intimate whether service tax is applicable on me or not.
      thanking you