Service Tax on White wash & Painting

[Vinay Sharma]

Dear Sir,

Contract is for White wash and Painting with material and labour.

The contractor is not registered under service tax act and do not charge service tax on bill.

Will it be regarded as works contract and are we liable to service tax under reverse charge. If yes, then service tax will be 6.16% of 40% of bill value or 6.16% of 70% of bill value.

Regards.

AI Summary

Service tax reverse charge on works contract: recipient liable to pay tax on a specified portion of the bill.
When white wash and painting with supply of materials and labour amount to a works contract, the recipient must pay service tax under the Partial Reverse Charge Mechanism, with tax computed on 70% of the total bill at the composite rate referenced in the replies; the recipient can avail input tax credit. "Works contract" is defined as a contract involving transfer of property in goods in execution of construction, repair, renovation, fitting out or similar activities.