GOVERNMENT OF INDIA
MINISTRY OF FINANCE
(Department of Revenue)
New Delhi, the 22nd May, 2007
1 Jyaistha, 1929 (Saka)
Notification No. 29/2007-Service Tax
G.S.R. (E). In exercise of the powers conferred
by clause (aa) of sub-section (2) of section 94 of the Finance Act, 1994 (32 of
1994), the Central Government hereby makes the following rules further to amend
the Service Tax (Determination of Value) Rules, 2006, namely:-
1.
(1) These rules may be called the Service Tax (Determination of Value)
(Amendment) Rules, 2007.
(2)
They shall come into force with effect from the 1st day of June,
2007.
2.
In the Service Tax (Determination of Value)
Rules, 2006, after
rule 2, the following rule shall be inserted, namely:-
“2A.
Determination of value of services involved in the execution of a works
contract:
(1) Subject
to the provisions of section 67, the value of taxable service in relation to
services involved in the execution of a works contract (hereinafter referred to
as works contract service), referred to in sub-clause (zzzza) of clause (105) of
section 65 of the Act, shall be determined by the service provider in the
following manner:-
(i) Value
of works contract service determined shall be equivalent to the gross amount
charged for the works contract less the value of transfer of property in goods
involved in the execution of the said works contract.
Explanation.-
For the purposes of this rule,-
(a) gross amount charged for the works contract shall not include Value
Added Tax (VAT) or sales tax, as the case may be, paid, if any, on transfer of
property in goods involved in the execution of the said works contract;
(b) value of works contract service shall include,-
(i)
labour charges for execution of the works;
(ii)
amount paid to a sub-contractor for labour and services;
(iii)
charges for planning, designing and architect’s fees;
(iv)
charges for obtaining on hire or otherwise, machinery and tools used for the
execution of the works contract;
(v)
cost of consumables such as water, electricity, fuel, used in the execution of
the works contract;
(vi)
cost of establishment of the contractor relatable to supply of labour and
services;
(vii)
other similar expenses relatable to supply of labour and services; and
(viii)
profit earned by the service provider relatable to supply of labour and
services;
(ii) Where
Value Added Tax or sales tax, as the case may be, has been paid on the actual
value of transfer of property in goods involved in the execution of the works
contract, then such value adopted for the purposes of payment of Value Added Tax
or sales tax, as the case may be, shall be taken as the value of transfer of
property in goods involved in the execution of the said works contract for
determining the value of works contract service under clause (i).
[F. No. B1/7/2007-TRU]
(G.G. Pai)
Under Secretary to the Government of India
Note: The principal rules were published in the Gazette of India, Extraordinary vide notification No. 12/2006-Service Tax, dated the 19th April, 2006, vide number G.S.R. 228 (E), dated the 19th April, 2006, and were last amended vide notification No. 24/2006-Service Tax, dated the 27th June, 2006, vide number G.S.R. 383(E), dated the 27th June, 2006.
