25 April 2012
When a contractor providing Service of Construction of commercial/industrial building with material, it covers under the service of works contract ,what is the logic behind sustaining the abatement of 67% in industrial/commercial contracts.
25 April 2012
such service will come under works contract only if vat is also payable on such material so transfrd.... the logic is to make chargeble onle the service part(i.e. to remove material amount from such)
Manish, the idea is to exclude the material component and there by levy Tax only on the services rendered.
Further, I suppose this practice is mostly followed for the contracts where no proper records are maintained for bifurcating the total value into the material supplied & services rendered.
CAclubindia
