Service tax on work contract

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

15 December 2015 A Repair and maintenance Contract of Rs 85000 is given to proprietorship firm by body corporate.

Invoice raised by proprietorship firm as under

service Rs 85000
(No bifurcation of material and labour)

AS It comes under RCM body corporate required to pay 50% ST. NOW Body corporate do calculation as under

TDS @ 1% 850
vAT @ 4% 3400
ST @ 14% ON 70% VALUE 4165

AFTER ALL DEDUCTION ABOVE PAID TO CONTRACTOR 76585

Contractor said that his taxable service is less than 10 lakh so service tax is not applicable on him and not required to deduct from his bill.

But Body corporate said that as it comes under RCM 50% portion will be paid by body corporate and as in invoice / quoation there is not mentioned that service tax will be paid extra, thats why service tax deemed to be inclusive in bill and deducted from contractor bill amount.

my question is

whether body corporate is correct in deducting service tax from contractor bill amount?

please give link where it is mentioned that service tax deemed to inclusive if not mentioned in agreement.