Repair of Building and Service Tax

[Ashok Chopra]

Respected Forum,

I am manufacturer-exporter of ready made garment. I have done repair of building. Building material supplied by me to labour contractor. labour contractor with own and two-three workmen done the labour job. During audit, officer is of opine that this is work contract and i am liable to pay service tax under reverse charge mechanism.

Please guide me accordingly.

Thanks and regard

AI Summary

Works contract classification determines reverse charge and service tax liability where owner supplies materials and contractor supplies labour.
Classification of repair work where the owner supplies materials to a contractor affects who bears service tax and whether cenvat credit applies. Opinions diverge: one sees a Works Contract Service triggering reverse charge on the owner and denial of cenvat credit under rule 2(l) of CCR; another treats it as contractor-provided construction or pure labour service with the contractor responsible to collect and pay tax subject to the exemption threshold. The factual question of control over labour and characterisation of material supply is decisive.