Coverage of Works Contract

[Rahul Mandal]

Whteher the reverse charge mechanism applicable w.e.f 01-07-2012 would also apply to 'Repairs & Maintainance activity' / 'AMC' / 'Commercial or Industrial Construction' due to wider scope of Works Contract.

[YAGAY andSUN]

Yes, it will be.

[Harsh Jindal]

Please refer to notification no 30/2012

You have to pay the tax on 50% of the service portion in a Work Contract.

AI Summary

Reverse charge mechanism applies to repairs, AMC and construction under works contracts; tax due on declared service portion. The reverse charge mechanism effective from 01-07-2012 applies to repairs and maintenance, AMC, and commercial or industrial construction when these fall within the expanded scope of a works contract, and tax under the reverse charge is to be paid on fifty percent of the service portion as prescribed by the cited notification.