works contract service

[jagannath prasad]

we would be grateful if following doubts are clarified :-

1) Under what Head would the service of a sub- contractor of a builder of residential complex be classified if he is not registered in sales tax and does not pay VAT

2) whether cenvat credit of service tax paid for past liability by a sub contractor is admissible to the main contractor even if SCN is issued.

3) Is payment of VAT necessary for a service to be classified as Works Contract Service.

AI Summary

Clarification on Works Contract Service: Construction Services Inclusion, Cenvat Credit Limits, and VAT Implications Discussed A discussion on a forum addressed questions about the classification of services under Works Contract Service, particularly for sub-contractors in the construction sector. It was clarified that since July 1, 2012, all construction services fall under Works Contract Service, with specific accounting codes for statistical purposes. The eligibility for Cenvat credit on past liabilities is limited by time constraints. The necessity of VAT payment for classification as Works Contract Service was questioned, noting VAT as a state matter. Additionally, it was discussed that pure labor services and installation services, without property transfer, are not classified under Works Contract Service.