works contract service

[Asked by Guest]

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

Works contract service classification: construction services attract reverse charge and abatements; VAT payment alone is not decisive.
Construction services are consolidated under Works Contract Service with varying abatements and subject to the Reverse Charge Mechanism; sub-contractors must register by service nature. Cenvat credit of past liabilities, if otherwise admissible, is subject to statutory time-bars and may be affected by issuance of notices. VAT payment is not dispositive of works contract classification. Pure labour, and standalone erection/installation and commissioning, are treated as services only and free-supplied machinery is excluded from the taxable value when no transfer of ownership occurs.