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

Works contract service classification: provider status allows abatement; recipient may be liable under split reverse charge mechanism. A contractor performing a works contract is the service provider and may claim abatement; where the provider is an individual, HUF, proprietary concern, partnership or association of persons in the taxable territory, tax liability is split so that the recipient pays fifty percent under the Reverse Charge Mechanism while the provider pays the remainder.