Sir,
We have completed Spot Load Fixture Installation and Electric power Analysis work (Fabrication & Labour Charges Fabrication, Pipe Reilling work from contractor. We capitalized it to Plant & Machinery. Contractor charged Service Tax as under
Bill Amount - ₹ 1,59,298/-
Service Tax 15% of 50% of 40% = 159298 X 15% = 23894.7 X 50% = 11947.35 X 40% = 4778.94
Our Query is Is it come under RCM? and balance 60% ST Is payable by us? Can we take Service Tax Credit.
Pl guide.
Thanks,
Khomne R. M.
Service Tax on Installation: Reverse Charge Mechanism and CENVAT Credit Eligibility under CENVAT Credit Rules, 2004 Discussed A query was raised regarding the applicability of service tax on the installation and analysis work capitalized to Plant & Machinery. The contractor charged service tax, and the question was whether it falls under Reverse Charge Mechanism (RCM) and if the remaining 60% service tax is payable by the company, along with the eligibility for service tax credit. Respondents clarified that the service may qualify as a Works Contract Service, affecting the applicability of RCM based on the service provider's status. CENVAT credit is available per the CENVAT Credit Rules, 2004, and distinctions between 'abatement' and 'service portion' were noted. (AI Summary)
TaxTMI 
TaxTMI 
