Is service tax payable on Work Order

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  1. Adithya

    Adithya New Member

    Dear Sir,

    I initially entered into an agreement of sale for an under-construction flat and now I am being asked to pay to Service Tax.
    Amount as Agreement of Sale: 3256625(no mention of work order)
    Amount as regn doc:2220000.( no mention of work order)
    As I applied for loan and two cheques were issued one for Builder and the second one in the name of third party for work order.

    Now please let me know if I am supposed to pay service tax on Work Order cheque as well as there is no mention of the work order cheque neither in the regn document nor in the Sale Agreement.

    Early response will be appreciated.

    Regards
    Adithya
     
  2. rudrabose

    rudrabose Active Member

    As a general rule, Service Tax is levied on Work Order.

    Now, in the contract that you entered for Work Order, it would be mentioned whether the contract value is inclusive or exclusive of Service Tax.

    If nothing is mentioned, it would be assumed that it is inclusive of all taxes.
     
  3. Adithya

    Adithya New Member

    Dear Sir,
    There is no mention of work order either in the agreement of sale or in regn document.

    Work order has only been mentioned for loan documents.

    Regards
    Adithya
     
  4. rudrabose

    rudrabose Active Member

    If it has not been mentioned that Taxes would be paid by the buyer, it is assumed that the price quoted is inclusive of Service Tax.
     
  5. In my opinion, and from the agreement point of view, since there is no mention of service tax in the agreement, you may need not to pay any extra amount apart from the amount mentioned in the agreement.
     
  6. Adithya

    Adithya New Member

    Amount as Agreement of Sale: 3256625(no mention of work order)
    Amount as regn doc:2220000.( no mention of work order)
    In the registration doc there is no mention of work order at any place and also there is no seperate Work Order ag done.... So I am ready to pay service tax on amount as per regn doc but the builder insists that the workorder holder is also liable to pay service tax and hence I have to pay serv tax on amt as ag of sale and not regn doc.
    Hope it is clear and early response would be highly appreciated
     
  7. rudrabose

    rudrabose Active Member

    But when their is no mention of the work order anywhere in the contract, then why are you paying him???

    If you are initiating a new contract for work order, in that case you would be liable to pay Service Tax.

    But, if it is contract which has already been enterred into - then service tax is not required.

    Please also note that word of mouth contract does not have any value. It has to be stated on paper.
     
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