Service Tax on PVC Flooring Installation Job

[Asked by Guest]

Dear Senior Members,

Request you to guide in the following scenario -

Is PVC flooring installation job (during construction of a new Govt Hospital given by main contractor to a sub contractor) can be termed as a Work Contract Service or not?

Background: -

1) Parties involved

Party A = Government, a local authority or a governmental authority

Party B = Main Contractor (Limited Company / Body Corporate)

Party C = Sub Contractor (Proprietorship / Partnership)

2) PVC Sheets / Rolls are supplied by Service Receiver to Service Provider.

3) Service Provider (Sub Contractor) buys Adhesive, which is used as Consumable for fixing of PVC Sheets on floor. This adhesive is consumed during the execution of labour work of PVC Installation.

Questions :-

1) If PVC flooring installation job is not considered as a Work Contract service (due to only incidental use of adhesive material as Consumable) than is it true that Entry No. 29 (h) of Mega Exemption Notification No. 25/2012 dated 20.06.2012 won't be applicable and exemption won't be available in Service Tax to the Sub Contractor and ST 14% + SBC .5% + KVC .5%

2) Can we consider the above case of PVC flooring installation job as Manpower job?

3) If this can be considered as a Manpower Job than whether Service Provider (Sub Contractor - Proprietorship / Partnership) would be required to charge service tax in his invoice or the service receiver (Main Contractor - Limited Company / Body Corporate) has to discharge his 100% Service Tax liability @ 15% under Reverse charge mechanism slab applicable since 01.06.2016.

Would be highly obliged if you can guide in this matters and answer my queries.

Regards

AI Summary

Works Contract Classification versus Pure Labour: incidental consumables do not convert installation services into works-contract exemption.
The issue is whether PVC flooring installation by a subcontractor - with PVC supplied by the recipient and adhesive consumed by the subcontractor - is a Works Contract Service or pure labour. Forum contributors conclude the adhesive is an incidental consumable and does not amount to transfer of property in goods, so the activity should be treated as a taxable pure labour service, not works contract, and not as manpower supply; consequently Entry 29(h) exemption is not available to the subcontractor and reverse charge claims based on manpower supply or works-contract classification are unsupportable.