Service Tax on Painting Contract.

[THYAGARAJAN KALYANASUNDARAM]

Dear Expert,

One of our customer is executing the painting works contract, we would like to know whether we should take the value of the contract 40% as original work (or) 70% as finishing service.

Thanks in advance.

AI Summary

Painting Contracts Classified as Finishing Services, Subject to 70% Service Tax per Service Tax Rules, 2006. A customer executing a painting works contract inquired about the applicable service tax rate, questioning whether to consider 40% as original work or 70% as finishing service. Experts responded that painting is categorized as a finishing service, thus subject to a 70% service tax rate. They clarified that if the work involves pure labor, the contractor bears 100% tax liability, with no benefit from the service portion. The responses referenced Service Tax (Determination of Value) Rules, 2006, which stipulate different tax rates for original works and finishing services.