WORKS CONTRACT SERVICE

[S.C. WADHWA]

Dear Expert,
We are running a factory and have got repaired work of our building from service provider who is not
registered where as we have registered with service tax deptt. His labour bill is for ₹ 75000/- only.
We have supplied the repairing material free of cost.
Now my query is whether we are being recipient of service are liable to pay service tax under reverse
charge and if yes then on which amount. Please give your expert opinion along with notification no.
REGARDS,
WADHWA

[Ganeshan Kalyani]

If your service porovider has provided only service then it will be taxable under forward charge because pure service related to construction is not covered under reverse charge.

However there are so many litigation on the free issue of material supplied to contractor who does incorporate the material in the civil work.

[DR.MARIAPPAN GOVINDARAJAN]

In my opinion, it comes under Man power supply which is liable for the service recipient to pay service tax on reverse charge mechanism.

[Ganeshan Kalyani]

The condition of supervision need to be checked for taxing under manpower supply service.

AI Summary

Factory Owner Queries Service Tax Liability on Building Repair: Forward Charge vs. Reverse Charge Debate A factory owner sought advice on whether they are liable to pay service tax under the reverse charge mechanism for building repair services provided by an unregistered service provider. The repair involved a labor bill of 75,000, with materials supplied by the factory at no cost. One expert suggested the service is taxable under forward charge since it is a pure service, not covered by reverse charge. Another expert opined it could be categorized under manpower supply, making the recipient liable for service tax under reverse charge, contingent on the supervision condition.