Thirty Party service Provider are liable for service tax or not.. ?

[Asked by Guest]

Dear Sir,

My Question is If company have get the order of 20,025,00/- Twenty Lac Two Thousand Five Hundred only

1500 M2 x 1335/- = 2002500/-

Terms & Condition :- Inclusive of Sales Tax & Installation charges (service tax on installation)

Now we issue the Tax/Sale invoice to Buyers inclusive of tax. or installation done by other party which is paid by me. and other party not paid the service tax.

so my question is Can we are liable for service tax or not.

Kindly suggest me.....

Regards

AMIT GUPTA

[Rajagopalan Ranganathan]

Sir,

If third party provided the service of installation then he is liable to pay service tax. You are not liable to pay service tax.

[YAGAY and SUN]

Please check the provision of subcontracting in this matter on VAT and Service Tax. Through the terms used in the contract we understand the sub contract was given to a third party by your company.

[DR.MARIAPPAN GOVINDARAJAN]

The points raised by Yagay and son are to be considered.

Sir,

I know sir, service tax Liability is third party But third party is less than 10 lac turnover of service.

In the purchase order mention clearly installation charges inclusive the rate of sale value. means we are service provider for installation.

As per your suggestion we are liable for service tax. I am right sir,

sorry typing mistake,

As per your suggestion the company is not liable for service tax which is service provide.

Third party is liable for service tax.

[Rajagopalan Ranganathan]

Sir,

If the invoice issued by the service provider includes the machinery supplied and installed by him, then it will become works contract service and you have to pay 50% of the service tax and the service provider will pay the remaining 50%. As per Sl. No. 9 of Notification No. 30/2012-ST dated 20.6.2012 as amended " in respect of services provided or agreed to be provided in service portion in execution of works contract", 50 % of the service tax is to be paid by the service receiver and remaining 50% is to be paid by the service provider.

[Ganeshan Kalyani]

In case of works contract service the service tax (determination of value) rule shall also apply.

AI Summary

Works contract service: service tax liability split between service receiver and provider under prescribed notification.
Liability for service tax on installation depends on who provides and invoices the service: a third party subcontractor who performs and invoices installation is primarily liable, but if the supplier's invoice bundles goods and installation making the supplier the provider, the transaction may be treated as works contract service with service tax apportioned 50% to the service receiver and 50% to the service provider, and the works contract valuation rules will apply.