works contract service

[THYAGARAJAN KALYANASUNDARAM]

One of my customer is providing building painting contract. Since he is

collecting 12.36% on 40% of the contract value i.e. 4.944% and remitting

the same to the service tax department. I would like to know whether this contract

under original contract or other than original contract. If so it will come under

finishing services. Then he need to pay 12.36% on 70% of the contract value.

can any one explain which one is correct with the suitable example.at. If

[Kamal Jhanwar]

Sir,

This painting work will be covered under Completion and finishing service and therefore, he should discharge liability on the 70% portion of the value of the works contract. You may refer the judgement of Tribunal-Mumbai in case of "The Carpentar V comm of C.Ex & ST, Pune-III/Mumbai-III,2014 (36) STR1137 = 2014 (9) TMI 179 - CESTAT MUMBAI read with N/N 1/2006 in support of this answer.

AI Summary

Service Tax Update: Painting Contracts Classified as Finishing Services, Tax Applicable on 70% of Contract Value. A customer providing building painting contracts is currently collecting and remitting service tax at 4.944% on 40% of the contract value. The query seeks clarification on whether this contract is considered an original or other than original contract, which would require a service tax of 12.36% on 70% of the contract value as a finishing service. The response clarifies that the painting work falls under completion and finishing services, necessitating tax on 70% of the contract value, supported by a Tribunal-Mumbai judgment and a specific notification.