WORKS CONTRACT ACT

[S.C. WADHWA]

Dear Expert,

1	We have recently got constructed one new factory in Haryana.
2	Now office has to be developed with material cost to ₹ 1.50 crore.
3	We will supply the developing material duly vat tax paid directly to the developer.
4	Developer will raised us his bill approx ₹ 28 lacs plus service charge applicable at the time of completion of his work.
	QUERY
	Whether there is any liability of service tax on us regarding supplying of developing material to developer directly. In this case whether WCT applicable.
1	Please give your expert opinion whether we have any liability of service tax
	and WCT. If yes at what amount.

AI Summary

Company's Factory Development: No WCT or Service Tax Liability, TDS Applies, No Service Tax Input Credit Available. A company in Haryana constructed a new factory and is developing an office with materials costing 1.50 crore, supplied directly to the developer with VAT paid. The developer's bill is approximately 28 lakhs plus service charges. The company inquired about its service tax and Works Contract Tax (WCT) liabilities. Experts advised that since the contract involves only labor services and materials are supplied separately, WCT does not apply, and there is no service tax liability on the company. However, TDS liability exists, and service tax input cannot be availed.