works contract

[Raja krishnan]

Dear Sir,

we are doing construction business under works contract for a LTD concern. so which category we are coming under this operation whether service provider or service receiver also please clarify we are applicable for abatement as well as RCM.

[PAWAN KUMAR]

Dear Sir,

As per my view, You are the service provider. You can claim abatement.

[Rajagopalan Ranganathan]

Sir.

As per the facts stated by you, you will be the service provider and the LTD concern will be the service receiver.

In respect of services provided or agreed to be provided by way of works contract the person receiving the service is liable to pay service tax on 50% of the value, if the service provider is individual, HUF, proprietary firm, partnership firm (registered or not) or association of persons located in the taxable territory. The service provider is liable to pay service tax on balance 50% vide Sr. No. 9 of Notification No. 30/2012-ST dated 20.6.2012.

AI Summary

Construction Business as Service Provider Under Notification No. 30/2012-ST: Reverse Charge Mechanism Explained for Tax Duties A construction business operating under a works contract for a limited company inquired about their classification as a service provider or receiver and their eligibility for abatement and Reverse Charge Mechanism (RCM). Two responses clarified that the business is the service provider, and the limited company is the service receiver. According to Notification No. 30/2012-ST, the service receiver is responsible for paying 50% of the service tax if the provider is an individual, HUF, proprietary firm, partnership firm, or association of persons in the taxable territory, while the service provider pays the remaining 50%.