Value of free supply to be included in assessment of service tax

[ramswaroop vyas]

Dear All,

We are giving small works contract to contractor for installation of machine or repair and maintance, we provide him maximum of material required for the process apart from small like welding rod etc are used by him.

now we are paying service tax on 70% of value.

My question is ...does the value of material given by us to our services provider will be included in tax compution.

regards

ram vyas

AI Summary

Valuation of free-supplied materials may be contested for inclusion in service tax assessment pending authoritative resolution.
Whether free-supplied materials must be included in the taxable value for service tax hinges on whether such materials constitute consideration; revenue seeks addition of their value using fair-value approaches while taxpayers argue free issue lacks consideration under the Finance Act, and resolution awaits authoritative judicial determination.