Category - Installation services and Maintenance & Repair Services

[Asked by Guest]

Reg: Service tax on Installation services:- Installation of Air-conditioner Exemption notification under Notification-18/2003 for individual is withdrawn on 16-6-2005. Now issues are as follows: 1. If the individual received advance of Rs.3,00,000/- before 16-6-2005 and service rendered after 16-6-2005, whether service tax attracted ? 2. If individual raises invoice for Rs.10,000/- as follows: Installation services 7,500 Reimbursement of expenses 2,500 (As per Bills attached) --------- Total 10,000 3. Whether repair charges for Air-conditioner is taxable under Maintenance & Repair Services. Some experts are in the view that it will taxable if it is under AMC only. Is it correct ?

[Surender Gupta]

In case you haver received advances before 16.06.2005, Service tax is payable when you provide the services actually. Installation services in the hands of individual is taxbale w.e.f 16.6.2005. Currently, irrespective of the fact that repair services has been provided under an AMC or individual contract, it shall be liable service tax.

AI Summary

Service tax on installation services applies when services are performed; repairs are taxable whether under AMC or individual contract.
Installation services by individuals became taxable from 16 06 2005; advances received before that date are taxable when the services are performed thereafter. Reimbursements backed by bills do not change taxable consideration, and repair charges for air conditioners are taxable under Maintenance & Repair Services whether supplied under an AMC or as individual contracts.