Categri of Service Tax

[MAYUR DODIYA]

Dear Expert

we are providing service of Construction service of Commercial and indus. civil structure (works Contract Service) but our contract only for labour works and we are charges Service tax at the rate of 12.36 percent on 100 percent Contract Value so can i pay Service tax in Categri of Works Contract. or any other categri.

thanks

[dipsang vadhel]

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.

First part of the definition is that there must be transfer of property in goods in the contract while executing the contract. If no transfer of property is involved then it is not covered under works contract. 

In my opinion, yocase is of not works contract Service but it is a contract of pure service. If manpower deployed by you for construction service is placed under control and superintendence of Service receiver (i.e. your client), service will be taxable as Man power service. If manpower deployed by you for construction service is not  placed under control and superintendence of Service receiver, Service ( at the rate of 12.36 percent on 100 percent value  which you have done corectly) will be taxable ( at the rate of 12.36 percent on 100 percent value  which you have done corectly) as "Commercial or Industrial Construction Service".

[MAYUR DODIYA]

THANKS SIR

 

AI Summary

Classification of construction services: determine works contract versus manpower or commercial construction service based on transfer and control. Classification for service tax depends on transfer of property in goods and control of deployed labour: a contract involves a works contract only if transfer of property in goods occurs; otherwise, if the client exercises control and superintendence over the labour it is manpower service, and if the provider retains control it is Commercial or Industrial Construction Service, taxable on the full contract value.