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.

AI Summary

Reverse Charge Mechanism Applies to Repairs and Construction; Refer to Notification No. 30/2012 for Works Contracts Tax Details. A query was raised regarding the applicability of the reverse charge mechanism effective from July 1, 2012, to activities such as repairs, maintenance, annual maintenance contracts (AMC), and commercial or industrial construction, in light of the expanded scope of works contracts. One respondent confirmed that the reverse charge mechanism would apply. Another respondent advised referring to notification no 30/2012, stating that tax must be paid on 50% of the service portion in a works contract.