Regarding Service Tax on Installation charges

[GR Satishkumar]

Dear Expert's

Please give your valuable comment''s on below issue.

One of my clients engaged in Manufacturer of Modular Furnitures.It is a partnership company, company had registered under Central Excise and Service Tax also.Company comes under SSI unit.

1.Company made Excise Invoice but Excise not charged because ( previous year Turnover not crossed 4 Crore).

For Example in Invoice breakup can be given below.

Material Cost Rs 100

Freight cost Rs 10

Installation Charges ₹ 10

Excise Duty Exempted as per section SSI/08/2003/CE

VAT @ 14.5% (on ₹ 120) 17.40

Total Material Cost 137.40

We filed ER3 return Quarterly and we shown Installation charges is also Excise Turnover in ER3 Return.

Now my question is on Installation charges we have charged Service Tax or we make separate Bill for Material and Separate Bill for Installation.

Please guide me.

AI Summary

Modular furniture company advised to issue separate invoices for material and installation to simplify service tax compliance. A client involved in manufacturing modular furniture seeks advice on handling service tax for installation charges. The company, a partnership registered under Central Excise and Service Tax, did not charge excise duty due to turnover below 4 crore. Experts recommend issuing separate invoices for material and installation to simplify accounting and compliance. Some suggest including installation charges in material cost, while others advise separate billing to avoid disputes. The discussion highlights the importance of clear invoicing to distinguish between excise duty and service tax obligations, emphasizing practical approaches to avoid litigation and ensure legal compliance.