I am working in a NGO. Recently we have signed a agreement with CSR regarding construction of a new pond in their project area. The details of budget is as under-
1) Purchase of cement, sand etc. Rs. 15,00,000 2) Labour Rs. 5,00,000.00 3) Our services charges (Admn.) Rs. 2,00,000.00
Total project cost is Rs. 22,00,000.00
My question is whether we have to charges the services tax @14% on total project cost i.e. 22,00,000.00 or on our Admn. charges i.e. Rs. 2,00,000.00
Here we have to purchase and arrange all the material etc.
In your case, service falls under "declared service" and it is "Works Contract". Hence service tax is payable on the 40% of the total value of contract i.e., 40%*22L*14%= Rs.123200/-
CAclubindia
