Building Construction under Work Contract Tax

[RAM SHARMA]

Dear Experts,

We want to make Building with material, without material ,partially material or repair of building through under contractor or under own supervision. Will all these condition with labour expenses come under Work Contract Tax notification no 30/2012 dt. 20.06.12 reverse charge machenism.

Please advice.

Thaks

[CASeetharaman KC]

Notification no 30/2012 which is the reverse charge notification provides that the service tax on the service portion of a works contract shall be shared between the service provider and the service receiver equally i.e @ 50% : 50% provided the service provider is an induvidual , HUF or Partnership Firm, whether registered or not, including an association of persons, located in the taxable territory and the service receiver is a business entity registered as a body corporate located in the taxable territory. This would mean that the service portion of the Works Contract is taxable in the above stated manner. The mechanism of arrving at the service portion of Works Contract is discussed by Notification no 24/2012 which covers the valuation aspect for Works Contract.

[RAM SHARMA]

Sir,

I am little bit confuse that how can i analyse that such services will come under Notification No. 30/2012

AI Summary

Reverse charge on works contract services: liability shared between small providers and corporate recipients; valuation governed by notification. The reverse charge mechanism applies to the service component of a works contract where the provider is an individual, HUF or partnership firm and the receiver is a registered body corporate; the service tax on the service portion is shared equally between provider and receiver. The valuation notification dealing with works contract valuation governs the method for determining the service portion to be taxed under this sharing arrangement.