Service tax For installation

[Balamurugan R]

Dear All,

We have some Service Providers who are doing the work of Installation, Commissioning, Erection, for machinery,

- They are Individuals not having the Service tax registration

- Charging the bill in the name of Commissioning, Rewinding works like that and the amount of the work

-This was an first time installation works for machinery and we have booked in the asset account

For the above points shall we need to pay the service tax on behalf of the vendor, (If yes pls provide clarification on which head to be paid and the percentage)

Kindly suggest,,

Read more at: http://www.caclubindia.com/#

AI Summary

Service Tax Liability for Installation Services: Labor vs. Material, Reverse Charge Mechanism, and Notification No. 30/2012-ST A discussion on service tax liability for installation, commissioning, and erection services by individual service providers without service tax registration. The consensus is that if the work involves only labor, the recipient is not liable for service tax. However, under the reverse charge mechanism, if materials are involved, the recipient, if a corporate body, may need to pay service tax. The importance of invoice descriptions and the applicability of Notification No. 30/2012-ST are highlighted. The service tax rates for works contract services are specified, with a distinction between original and other works contracts.