Works Contract

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....orks Contract<br> Query (Issue) Started By: - IRFAN MALIK Dated:- 6-4-2019 Last Reply Date:- 7-4-2019 Service Tax<br>Got 2 Replies<br>Service Tax<br>Dear Sir/Madam, Following is the query with regards to Service Tax. We have constructed a whole new hotel. Further we had given contract to a vendor for all new construction of wooden doors/windows in newly constructed hotel. The vendor while issui....

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....ng the invoice has taken abatement of 60% & charged Service tax on balance 40% of the service value as per Rule 2A of the Service Tax (Determination of Value) Rules, 2006 by consdering the contract as &quot;Original Works Contract&quot;. However the Service Tax officer during the course of audit has considered the above works contract as &quot;Other then Original Works Contract&quot;. Accordinly ....

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....he said that abatement will be 30% & not 60%. He is of the opinion that original works contract covers only all new civil constructions & not ALL new constructions. Hence he has given has abatement of 30% & not 60%. due to same there is a huge Service Tax liability on the asessee along with interest. Is the service tax officer correct that only 30% abatement is available & not 60%. kindly suggest....

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.... & guide. Thanking in anticipation. Regards -Irfan Malik Reply By KASTURI SETHI: The Reply: Where is the word, &quot;civil&#39; in Rule 2 A of Valuation Rules ? None can interpret law according to one&#39; s sweet will irrespective of the person whether assessee or department&#39;s officer. You are to go by the Act and not by the rules. Examine the definition of Works Contract Service provide....

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....d in the Finance Act. Definition was changed. The words, &quot; completion and finishing &quot; were changed. The phrase &quot; &quot;fitting out&#39; was inserted. You must fight the issue legally. Reply By DR.MARIAPPAN GOVINDARAJAN: The Reply: I concur with the views of Sri Sethi.<br> Discussion Forum - Knowledge Sharing ....