Defination of work contract & reverse charge

[Vikas Aggarwal]

Dear Sir,

Please help to solve my query.

1. Material was mandatory to fall in the defination of work contract, if a service provider provided services say AMC or repair & maintenance but in that service there was only labour portion whether the above case fall under defination of work contract.

What is the situation if material was provided by service receipant.

2. If an individual provided work contract services to other & raised bill of Rs. 20 Lakh, service receipant is also an individual, than in that case service provider charge service tax on full amount or 50% of bill raised.  (50% of Rs. 20 lakh).

 

Regards,

Vikas Aggarwal

AI Summary

Works contract distinction: pure service segments aren't works contracts; reverse charge applies only to corporate recipients.
A works contract requires transfer of property in goods constituting a taxable sale; pure labour-only or service-only arrangements do not qualify as works contracts and are treated as services. The reverse charge notification applies to specified individual/HUF/partnership providers of works contract services only when the recipient is a body corporate; where the recipient is not a body corporate the reverse charge does not apply and the provider must discharge the service tax.