Chargiability of service tax - construction service – commercial or industrial service

[Vijay Chitte]

One of our service provider providing service in the catergory of construction service – commercial or industrial service to us, in our case, we have contract that all the material (i.e. cement, still etc.) will be supply by our company. Question is: Can service provider charge the service tax (33% on gross amount) on services and material also, if materials supplied by the clients? Or Service tax charge only on construction services? Any one can provide me any case law?

[Guest]

dear friend in your case you can handle it by two ways 1. charge 12.5 % wct on whole amount 2. charge Vat on material and service tax on construction service.

AI Summary

Service tax chargeability: treat client supplied materials under VAT while imposing service tax only on construction services. The central question is whether service tax applies to materials supplied by the client under a construction contract. The operative guidance recommends two approaches: apply withholding tax at source on the whole amount, or segregate billing and charge VAT on materials while charging service tax only on the construction service component.