Construction Service or Works Contract Service ??

[paresh ayadi]

Sir,

Our company has executed contract for following activities

1. Construction of compound wall at dam under Corporate Social Responsibility project

2. Local Road renovation under Corporate Social Responsibility

3. Repairs & maintainance of office building which includes civil work, painting work, carpenter work, sanitation work etc..

under which category above activities fall ? Whether service covered under RCM ? Service Provider is non body corporate.

what is key factor for distinguish between construction service and works contract service ?

thanks

AI Summary

Works contract classification depends on material supply; pure labour treated as construction service with RCM only if receiver is business.
Classification depends on material supply: supply with material constitutes Works Contract Service, while pure labour is Construction Service; pure labour services are not subject to reverse charge and liability rests with the service provider. Reverse charge applies only if the service receiver is a business. Specified CSR activities are prima facie works contracts and certain entries are exempt. For valuation, service portion is 40% for original works and 70% for repair/maintenance under the Service Tax (Determination of Value) Rules, 2006.