03 June 2013
Sir My client is Private Ltd Company and the contractor is an individual .Now the Company propose to construct a gowdown . 1. Our works contract is for an ORIGINAL WORK of construting a Godown.
2. Since the value of the materials used for the construction will not be completely identifiable with reference to the bills, immediately, at every stage when the contractor submits his bill, we hope to follow the COMPOSITE system of payment.
3. Under the above, 40 % of the total value of contract - i.e. in our case, 40 % of each stage bill into 12.36 % - to be shared at 50 % by the Receipient and 50 % by Provider.
Kindly confirm the above is in order for the Companyto advise the contractor and get his concurrence before starting deduction and remittance.
03 June 2013
as it is construction contract.you can get abatement of 60% on service tax. so service tax 2.472% is payable by you and equal amount is payable by contractor. contractor will charge 2.472% in bill. and same should be payable by your company under reverse charge ....
CAclubindia
