How does the service tax law differentiate between 'works contract' and 'pure service'?

In the context of service tax law, a 'works contract' refers to a contract where both services and transfer of property in goods are involved, primarily for the construction, fabrication, or installation of any immovable property. On the other hand, 'pure service' refers to a contract where only services are provided without any transfer of property in goods.

The service tax law differentiates between 'works contract' and 'pure service' based on the extent of involvement of property in goods in the contract. If the contract primarily involves services with minimal or no transfer of property in goods, it is considered a 'pure service' and taxed accordingly. On the other hand, if the contract involves a significant transfer of property in goods along with services, it is classified as a 'works contract' and subject to different tax provisions.

Therefore, to distinguish between 'works contract' and 'pure service' for tax purposes, the service tax law considers the nature and extent of property in goods involved in the contract.