TaxTMI 
TaxTMI 
Dear Experts,
As per new Work Contract Tax under reverse charge machenism a service receiver is liable to pay 50% serivice tax. Is all Annual Maintenance service comes under wct. Pl advice.
Thanks
Annual Maintenance under wct on reverse charge
19 Oct 2012 
4 Replies 
32971 Views Asked by
Works contract definition under reverse charge: annual maintenance of movable goods can attract reverse charge service tax when conditions met.
Works contract requires (1) transfer of property in goods leviable to tax as sale of goods and (2) a contract for activities including repair or maintenance of movable or immovable property; both conditions must be met to treat an agreement as a works contract for service tax. For AMC of movable goods a seventy percent taxable portion is commonly applied. Reverse charge applies when the provider is an individual/HUF/AOP/PF/LLP and the receiver is a company/body corporate, with service tax split so the provider pays half and the receiver discharges the balance under reverse charge. (AI Summary)
Works contract requires (1) transfer of property in goods leviable to tax as sale of goods and (2) a contract for activities including repair or maintenance of movable or immovable property; both conditions must be met to treat an agreement as a works contract for service tax. For AMC of movable goods a seventy percent taxable portion is commonly applied. Reverse charge applies when the provider is an individual/HUF/AOP/PF/LLP and the receiver is a company/body corporate, with service tax split so the provider pays half and the receiver discharges the balance under reverse charge. (AI Summary)