If Material and Service bill give separate

[Swapneswar muduli]

Dear Sir,

We are a manufacturer and we doing one ducting line for pass the smoke of our company the vendor doing this work with material and service. If the vendor will raise the bill material and labor combined then it will be attract for service tax under RCM as this vendor is proprietor.

if Vendor give the bill separate bill for material and separate for labor for installation in this case it is attract service tax under RCM or not.

and it is eligible for input credit or not ?

AI Summary

Service Tax and RCM: Separate Billing for Materials and Labor Still Constitutes a Works Contract A manufacturer inquired about the applicability of service tax under the Reverse Charge Mechanism (RCM) when a vendor issues separate bills for materials and labor for duct installation. The responses highlighted that the nature of the transaction remains a works contract, regardless of billing separation. One opinion suggested that if a combined bill is issued, service tax is applicable on 40% of the total amount. If separate bills are issued, service tax should be charged on the service bill, and VAT on the material bill. Another response emphasized that the separation does not alter the transaction's character, maintaining RCM liability on labor charges.