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         MAINTENANCE & REPAIR SERVICE
 
Q.1 In case of maintainance contract entered prior to March, 2003 for one year on receipt of the service charges for the whole year, it appears illogical to demand collect service tax on the services rendered prior to 14.5.2003 as the client has already paid the amount.  Who will pay the service tax and how? 
Ans. There are cases where maintenance contracts are entered into for a period of more than one year.  Vide Notification No.11/2003 Service Tax dt.20.06.2003, for maintenance contracts entered into prior to 1st July 2003, exemption has been provided to that part of the value of service for which bill/invoices have been raised and the amount has actually been received prior to the 1st July 2003.  For such contracts, all subsequent payments or payments made against invoice raised subsequent to the 1st July 2003 will be chargeable to service tax. 
Q.2 Whether service tax is applicable on maintenance and repair services provided by persons other than authorised service centres of companies? 
Ans. “Maintenance or repair” means any service provided by :- 
(i) any person under a maintenance contract or agreement; or 
(ii) a manufacturer or any person authorised by him in relation to maintenance or repair or servicing of any goods or equipments, excluding motor vehicle.  Therefore, service tax is applicable on maintenance and repair services provided by all such persons. 
Q.3 If there is a total sub-contract of the service, whether sub-contractor is supposed to take out a registration and discharge the tax liability? 
Ans. The sub-contractor need not take a registration under Service Tax.  In all such cases, Service Tax is to be paid by main service provider. 
Q.4 Whether maintenance and repair provided without any contract is taxable? 
Ans. The maintenance or repair service undertaken under a maintenance contract or agreement is only chargeable to Service Tax.
Q.5 Whether Annual Maintenance Contracts (AMC) for maintainance of roads are excluded from Service Tax ? 
Ans. As roads are neither goods nor equipment, the AMC for roads would not be covered under Service Tax. 
Q.6 Whether Service Tax on maintenance and repair would be charged in cases where during the guarantee period, the services are provided to the buyer of the goods while the payments for the same are received from the supplier of the goods? 
Ans. Irrespective of the fact that the receiver of the service is different from the person making payments for such services, the Service Tax is leviable on the service provided towards maintenance and repair.  Therefore, for the services provided during the warranty period by the dealer or any other authorized person, Service Tax would also be leviable on any amount received by such dealer or such other authorized person from manufacturer of such goods. 
Q.7 Maintenance or repair services rendered under contracts entered into prior to 01.07.2003 are exempted from Service Tax if the bills are raised, and payment also made, prior to 01.07.2003.  Whether Service Tax would still be chargeable in cases where through the bills are raised or payment made, after 01.07.2003 but services were rendered prior to 01.07.2003?
Ans. It is a cardinal principle of taxation that no tax can be levied or collected except by authority of law.  Thus, if the levy of Service tax on a particular service comes into force on a given date, that service will not be taxable if rendered before that date.  The levy of Service Tax on “Maintenance or Repair Service” has come into force on 01.07.2003.  Accordingly, any maintenance or repair service rendered prior to 01.07.2003 will not be taxable, irrespective of when the bills are raised or payment made.  This will apply to other services as well which were rendered prior to the imposition of Service Tax on them. 
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