Regarding Work Contract under reverse charge mechanism.

[Asked by Guest]

Dear Sir,

1) If we purchase a machinery parts and this price is including the installation charges also. and the material provider person comes our factory and install this parts in our machine.

In the above case service tax will attract under reverse charge mechanism or not for service recipient ?

2) some service provider repairs our split AC in our office and with material in that case service tax will attract or not ?

Can any one explain me the regarding Work Contact under reverse charge mechanism with example in which type of service falls under work contract and liable to pay service tax as a service recipient

Regards

Swapneswar Muduli

AI Summary

Reverse charge liability hinges on whether a parts-plus-installation supply is a works contract or a maintenance service.
Whether an inclusive contract for supply of parts with onsite fitting is a works contract subject to reverse charge depends on classification: one approach treats the composite supply (material plus installation) as works contract attracting reverse charge with split liability; the contrasting approach treats parts as sale and the fitting as maintenance/repair service, with the service provider liable to charge and remit service tax.