The question is regarding applicablity of service tax, and if yes then taxable amount?
Fact of Case
Company has imported a Plant & machinery from company XYZ in china . In the P.O of contract it has been mentioned that installation,Errection & commissioning will be done by the XYZ company only. For this officials from XYZ comapny will come to India to install and provide assistance.
Whether above mentioned case will attract service tax under import of service or works contract service & if Yes at what rate?
The Service shall be considered as Import of Services.
Erection,commissioning and installation of plant and machinery shall be considered as Original Works.
As per Rule 2A of the Service Tax Determination of Value Rules, 2006, service tax shall be payable on 40% value of services @12.36%.