Work Contract Service

[sunil jain]

Pl clarify wheher following services would be covered in 'Works Contract Service'[WCS] as per new definition in clause 54 of sec 65B.

a.Gift wrapping (as paper etc cost included)

b.Packing service( as paper & small materia cost included)

 c. Tailoring services (as thread, lining, button is included in cost of tailoring charges)

d.Interior decoration services( as fabric, blinds cost is included)

The items like fabric etc is subject to VAT.

The definition of works contract as per clause 54 is

'works contract' means a contract wherein transfer of property in goods involved in the execution of such contract is leviable to tax as sale of goods and such contract is for the purpose of carrying out construction, erection, commissioning, installation, completion, fitting out, repair, maintenance, renovation, alteration of any moveable or immovable property or for carrying out any other similar activity or a part thereof in relation to such property.

The work covered in r/o movable property is mainly repair, maintennace as construction, erection etc are relevant for immovable property and not for movable.

Hence, kindly clarify whether above service provided or recd would be in WCS as in such case liability would arise on reverse charge basis.

R.K. Aggarwal

AI Summary

Gift Wrapping, Packing, Tailoring Not 'Works Contract Service' Under Clause 54; Interior Decoration Qualifies A forum discussion addresses whether certain services fall under 'Works Contract Service' (WCS) as defined in clause 54 of section 65B. The services in question include gift wrapping, packing, tailoring, and interior decoration. The responses clarify that gift wrapping and packing do not qualify as WCS since they involve separate billing for materials and services. Tailoring is deemed a service activity, not a WCS. However, interior decoration is considered a WCS due to its relation to property and involvement of VAT-liable materials. The discussion also touches on the applicability of reverse charge mechanisms under specific conditions.