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Dated

No. 03(08)/2o13ttEEc/AKL/ I ? f

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14 lO3 12013.

o Subject :- Provision of Service Tax in estimates for Civil Works'

-.,n".*#ff"1'oT1l?f, :ffi",ffi i 1'3i|; ?[ llxil5 ii:ft iJ"lff LT',?i;3[t""tlJ"' +:i " Cofui of ry$fication is enclosed for ready reference'

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broadly classified in to Ab regarOs to the Civil works, Works contracts have now been applicability of service tax are briefly mentioned brelow' il;-"" t"i"g"ri".

r three i+il$. "tia oRrcrNALWoRK:servicetaxon40%oftotat amountofworkcontrac'ts. +141' .1 /'V-1. u:. ,. iliiilifrriNcE/REpAtFyREcoNDrroNtNcWoRK:servicetaxonTo%btioinat ff'L9h t amount of work contracts. e' -/ '4 s. ;Ni-oiHeR wonr nor covERED lN 1 & 2 ABovE :The service tax on 60% of total amount of work contracts'

Thedetailexplanationhasbeengiveninpara2A(iD(A,B&C)ofthesaidnotification.i' A/A&E/S' These provisions are to be applied while

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N otifi cati

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on No. 2412012 - SerV ce

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dated 0S0G 201 2

PUBLTSHED tN THE GAZETTE OF INDIA, EXIRAORDINARY, PART II, SECTION 3,

suB-sEcroN (iI Goremment of lndia Ministry of Finance (Department of Rewnue) New Delhi, the 6th June, 2012

Notification No. 24t2012 - Service Tax '1

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G.S.R. (E).- ln exercise of the powers confened by clause (aa) of sub-section (2) of section 94 of the Finance Act, 1994 (32 of 1994) and in supersession of the notification of the Government of lndia in the Ministry of Finance (Departme4t ,eT Rqwlue) number 11t2012 - Service Tax, dated the 17th March, 2012, published in tfre Ca26tte of lndia, Extraordinary, vide number G.S.R. 209 (E), dated the 17th March, 2012, the Central Goremment, hereby makes the following rules further to amend the Ser"vice Tax (Determination of Value) Rules, 2006, namely :1.(1) These rules may be called the Service Tax (Determination of Value) Second Amendment Rules,2012. (2) They shall come into force from the 1tt day of July, 2012.

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{ 1 ;,

of Value) Rules, 2006 (hereinafter refened to as the said rules), for rule 2A, the following rule shall be substituted, namely:-

2. lnthe Service Tax (Determination

"ZA. Determination of value of service portion in the execution of a works contract.- Subject to the provisions of section 67, the wlue 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:-

1

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Value of senvice portion in the execution of a works contract straiL be,eQuiwlent to the gross amount charged for the works contract less the wlue of property in goods transfened in the execution of the said works contract.

(i)

:.

clause,-

Explanation.- Forthe purposes of this ,' (a) gross amount charged for the works contract shall not$nclude wlue added tax or sales tax, as the case may be, paid or payable, if any, on tlhnsfer of property in goods inlohed in the execution of the said works contract;

(b) lalue of works contract service shall include,

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-

(i) (ii) (iii) (iv)

labour charges for execution of the works; amount paid to a sub-contractor for labour and services; charges for planning, designing and architect's fees; charges for obtaining on hire or otherwise, machinery and tools used for the execution of the works contract; cost of consumables such as water, electricity, fuel used in the execution of the works contract; cost of establishment of the contractor relatable to, supply',of labour and

(v)

(vi) services; (vii) (viii)

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other similar expenses relatable to supply of labour and services; and profit earned by the service provider relatable to supply of lAbour and services;

paid or payable pn the actual wlue of property in goods transferred in the execution of the works..contdbct, then, such wlue adopted for the purposes of payment of r,alue added tax or salbs tax, shall be taken as the wtue of property in goods transferred in the execution of lhe said works contract for determination of the lalue of service poftion in the execution'oJ works contract under this

(c) Where wlue added tax or sales tax has been

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clause.

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wlue has not been determined under ctause (i), the person liable to pay tax on the service portion inwlrcd in the execution of the works contract shall determine the senvicetaxpayableinthefol|owingmanner,namely:(ii) Where the

''': N otifi

cation No. 241?o12 - Servi ce

Tar dated 06-0G 201 2

'Explanation 1.- For the purposes of this rule, 'total amount" means the sum total of the gross amount charged and the fair market wlue of all goods and services supplied in or in relation to the supply of food or any other article of human consumption or any drink(whether or not intoxicating), whether or not supplied under the same contract or any other contract, after deducting(i) the amount charged for such goods or sendces, if any; and (ii) the wlue added tax or sales tax, if any, levied thereon: Provided that the fair market wlue of goods and services so supplied may be determined in accordance with the generally accepted accounti-ng principles. '.,

Explanation 2.- For the remowl of doubts, it is clarified that the proVder of taxable seiVce shall not take CENVAT credit of duties or cess paid on any goods blassifiable under Chapters 1 lo 22 of the Central Excise Tariff Act, 1985 (5 of 1986).".

5. ln the said rules, in rule 3, for the words "where the consideration receiwd is not wholly or partly consisting of money", the words "where such wlue is not ascertainable" shall be

substituted.

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6. ln the said rules, in rule 5, in sub-rule(1), in the Explanation, for the words, brackets, letters and figures "senices specified in sub-clause '(zzzx) of clause (105) of section 65 of the Finance Act, 1994, the wlue of taxable service shall be the gross amount paid by the person to whom telecom service is provided by the telegraph authority", the words "the lalue of the telecommunication service shall be the gross amount paid by the person to whom telecommunicatlon service is actually provided." shall be substituted.

7. ln the said rules, in rule 6,-

(a) in sub-rule (1),(i) in clause (viii), for the words "in any manner; and" the words "in any manner;" shall be i

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"rl": substituted; "insurance agdht; and" shall be (ii) in clause (ix), for the words "insurance agent", the words substituted; (iii) after clause (ix), the following clause shall be inserted, namely:"(x) the amount realised as demurrage or by any other name whatevrer called for the pror,ision of a service beyond the period originally contracted or in any other manner relatable to the provision of senvice.";

(b)

in sub-rule

(2),-

,",;

(i) for clause (iv), the following clause shall be substituted, namely:"(iv) interest on delayed payment of any consideration for the provision of services or sale

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propefty, whether moreable or immoreable;" after clause (v), the following clduse shall be inserted, namely:"(vi) accidental damagtss due to unforeseen actions not relatable to the provision of service;

(ii)

and

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(vii) subsidies and grants disbursed by the Gowmment, not directly affecting the ralue of

senice." ,i::

8. ln the said rules, rule 7 shall be omitted.

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tF. No. 334/1 12012-TRUI t

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(Rajkumar DigvijaY) Under Secretary to the Golernment of lndia

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