Works Contract Service is taxable Service introduced by Union Govt w.e.f dtd 1.6.2007. This Service comes into picture in cases where Goods & Service can not be separated. It is applicable in following services:-
1. Erection, Commission & installing Service.
2. Construction of Complex Service which is generally known as Residential Construction.
3. Commercial & Industrial Construction Service.
4. Turnkey projects.
In all the above Services, the Service Provider can pay Service Tax on the usual rate of 12.36% after getting abatement or he may opt for payment @ 4% on the value of Service treating it as a Contract Service.
These days maximum service in big factories and business concerns is provided in this category of Service.
In works contract service, transfer of property is involved. Service provided by Govt Authority is excluded from taxation.
The earlier definition of the "works contract" service was restricted to immovable property but w.e.f dtd 1.7.2012 the definition was expanded. In the definition, movable as well as immovable property, repair & maintenance etc was added. Besides this a major change of Reverse mechanism in payment of Service Tax was introduced wef. 1.7.12. If a body corporate is Service Receiver, then they have to pay Service Tax. in this category of service.
rtia.n
1. Erection, Commission & installing Service.
2. Construction of Complex Service which is generally known as Residential Construction.
3. Commercial & Industrial Construction Service.
4. Turnkey projects.
In all the above Services, the Service Provider can pay Service Tax on the usual rate of 12.36% after getting abatement or he may opt for payment @ 4% on the value of Service treating it as a Contract Service.
These days maximum service in big factories and business concerns is provided in this category of Service.
In works contract service, transfer of property is involved. Service provided by Govt Authority is excluded from taxation.
The earlier definition of the "works contract" service was restricted to immovable property but w.e.f dtd 1.7.2012 the definition was expanded. In the definition, movable as well as immovable property, repair & maintenance etc was added. Besides this a major change of Reverse mechanism in payment of Service Tax was introduced wef. 1.7.12. If a body corporate is Service Receiver, then they have to pay Service Tax. in this category of service.
rtia.n
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