2024 (11) TMI 205

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.... circular No. CBIC-160390/20/2024-JC-CBEC dated 06.08.2024. 1. The Respondent has also filed Cross-objection No. ST/Cross/10258/2019 against the common impugned order, challenging the demand of Rs. 3,36,748/- upheld by the Learned Commissioner (Appeals) and correspondence penalty and interest. This demand is on the issue that whether in the 'works contract service', the value of land should be included or otherwise. 2. Shri Nandesh Barai, Learned Charted Accountant appearing on behalf of the respondent, in the matter of the cross-objection filed by the respondent submits that on merit the value of the land cannot be included for the purpose of calculation of value of service portion in the execution of a works contract in terms of leg....

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....ontract service. Hence, provision of Rule 2 A (i) is reproduced below:- "[2A. Determination of value of service portion in the execution of a works contract.: Subject to the provisions of section 67, the value of service portion in the execution of a works contract , referred to in clause (h) of section 66E of the Act, shall be determined in the following manner, namely:- (i) Value of service portion in the execution of a works contract shall be equivalent to the gross amount charged for the works contract less the value of property in goods, 3C[or in goods and land or undivided share of land, as the case may be] transferred in the execution of the said works contract. Explanation.- For the purposes of th....

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....i) Where the value has not been determined under clause (i), the person liable to pay tax on the service portion involved in the execution of the works contract shall determine the service tax payable in the following manner, namely:- (A) in case of works contracts entered into for execution of original works, service tax shall be payable on forty per cent. of the total amount charged for the works contract; 3G[Provided that where the amount charged for works contract includes the value of goods as well as land or undivided share of land, the service tax shall be payable on thirty per cent. of the total amount charged for the works contract.]" From the above Rule 2A(i), it is clear that for the purpose of value of servi....