Applicability of service tax
This query is : Resolved
narayan jat
(Querist)
17 August 2015
dear expert,
whether the textile company has following work outsourced to contract basis-
1) mending work- total bill raised for the year approximate 4200000.
2) Folding work- total contract bill amount of Rs approximate 500000
please advise me for above given situation, what is applicable of service tax, if yes what is tax rate and also limit of service tax applicable.
thanks
whether the textile company has following work outsourced to contract basis-
1) mending work- total bill raised for the year approximate 4200000.
2) Folding work- total contract bill amount of Rs approximate 500000
please advise me for above given situation, what is applicable of service tax, if yes what is tax rate and also limit of service tax applicable.
thanks
CA Ayush Agarwal
(Expert)
17 August 2015
It will come under work contract-original contract.
40% is chargeable.
40% is chargeable.
CA R SEETHARAMAN
(Expert)
17 August 2015
No service tax payable if it falls under manufacturing activity for which excise duty is payable.
narayan jat
(Querist)
17 August 2015
sir,
this is no manufacturing activity. company has given work of check to cloth which is rectify of error in cloth.
this is no manufacturing activity. company has given work of check to cloth which is rectify of error in cloth.
CA R SEETHARAMAN
(Expert)
17 August 2015
14% service tax payable on 50% value of contract under RCM by the company.
CA Ayush Agarwal
(Expert)
19 August 2015
40% is taxable amount in this case as I already stated.
CA R SEETHARAMAN
(Expert)
19 August 2015
This contract will not fall under original works. What about RCM.
narayan jat
(Querist)
19 August 2015
pls clearify what is original work???
CA R SEETHARAMAN
(Expert)
19 August 2015
Construction of building is original work for which service tax payable on 40% value. Whereas for building repair work service tax payable on 70% value.
Your work of mending and folding is not original work.
Cloth manufacturing is the original work in your case.
Your work of mending and folding is not original work.
Cloth manufacturing is the original work in your case.
narayan jat
(Querist)
19 August 2015
thank you for giving suggestion. and once again thank you sir.
CA Ayush Agarwal
(Expert)
20 August 2015
@Narayan:-
Please go through detailed provision of work contract service, there are various If's & but's which you need to trace out for application of service tax.
In mega notification, there is exemption to Printing without material, moreover even material are provided then you havwe to check under which catagory it will fall, there are three sub type in work contracts.
Please go through detailed provision of work contract service, there are various If's & but's which you need to trace out for application of service tax.
In mega notification, there is exemption to Printing without material, moreover even material are provided then you havwe to check under which catagory it will fall, there are three sub type in work contracts.
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