Works Contract

[ANIL MANTRI]

A company procured boiler from a 'X' Company and gets it installed from 'Y' individual. 'Y' also brings some materials along with it for installation of the Boiler and charges service tax as if original works contract (40 percent *12.36 percent *50 percent ). The company who procured the boiler also paid its 50 percent share. My query is whether the cost of Boiler procured from X company will also form the part of Gross Amount Charged and the service tax has to be paid on the same? 

AI Summary

Service Tax Clarification: Installation Only, Boiler Cost Excluded from Tax Calculation per Original Works Contract. A company purchased a boiler from Company X and hired Individual Y for its installation. Y supplied additional materials and charged service tax based on the original works contract. The company paid its share of the service tax. The query was whether the cost of the boiler from Company X should be included in the gross amount charged for service tax purposes. The response clarified that the tax applies only to the installation activity by Individual Y, and the value of the boiler purchased from Company X should not be included in the service tax calculation.