AMC-Is AMC is a service under Repairs and Maintenance or Works Contract Service

[Anjum Kulshreshtha]

Sir, please guide whether AMC for different equipment and consumables items such as Cylinder gases etc. are to be classfied under Repairs and Maintenace service (100% Service tax) or Works Contract Service (70%) for the purpose of valuation of service tax liability?

AI Summary

Clarification on Classifying Annual Maintenance Contracts for Service Tax: Refer to Rule 2A of Service Tax Rules 2006. A query was raised regarding the classification of Annual Maintenance Contracts (AMC) for equipment and consumables, such as cylinder gases, under either Repairs and Maintenance service or Works Contract Service for service tax valuation. The response advised consulting Rule 2A of the Service Tax (Determination of Value) Rules, 2006, which outlines the determination of the value of the service portion in a works contract. The rule explains the components included in the works contract service value and the applicable service tax percentages for different types of contracts, including maintenance and repair services.