Civil Works

[N Balachandran]

Sir,

 

We are Manufacturer of Wind Mills having the Manufacturing unit at Pondichery.  We receive the Order from Customer for supply of Wind Mills from Pondichery to Tamil nadu under CST Sale and the Customer also place the work order on our Unit in Tamil Nadu for Civil work and Erection work.   Our Tamil nadu unit execute the Civil works and discharge the service tax liability @ 4.12%  ( Prior to 01.04.2012 ) under Works Contract Service .  The Erection work also done by Tamil Unit  and discharge the Service tax liability @ 10.3% under Erection and Commissioning Service.

Pl clarify, the method adopted by us for payment of Service tax is in line with the provisions or not ?.

Will the dept include the  supply value of Wind Mill which was done from pondy for payment of Service tax under works contract service?.  

Regards

 

N.Balachandran 

 

AI Summary

Windmill Manufacturer Seeks Clarity on Service Tax for Contracts; Three Payment Options Suggested for Cost Efficiency. A manufacturer of windmills based in Pondicherry sought clarification on service tax obligations related to civil and erection work contracts executed by its Tamil Nadu unit. The inquiry focused on whether the supply value of windmills should be included in the service tax assessment under works contract service. Responses highlighted three service tax payment options: deduction of material costs, a 12.36% tax on 40% of the contract value, or a 4.8% tax on the gross contract value. It was advised to conduct a cost-benefit analysis to determine the most suitable option, noting that the department cannot enforce a specific choice.