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

Completion and finishing service: painting works taxed on prescribed portion of works contract value per tribunal view.
Painting works performed as part of a works contract are classifiable as completion and finishing service rather than part of the original contract, and service tax liability should be computed on the prescribed portion of the contract value attributable to such finishing services in conformity with the cited tribunal view and administrative notification.