Composite vat / composite service tax.
This query is : Resolved
Querist : Anonymous
Querist :
Anonymous
(Querist)
16 May 2012
I mumbai based contractor , have an order from GOVT organisation where our scope is supply ,installation testing and commissioning of equipments.Client will issue common rate without break up of supply and services components. Job is in jharkhand State .
My query is when I bring the material from outside state by paying my C form, what will be VAT / Composite VAT liablity as rates are combined.
Also in same order there are few items which are free issue by client for installation. What should be service tax applied.
My order is all inclusive.But client wants taxable invoice for VAT and service tax.I want the most economical option, to pay minimum required taxes.
Simillar order is also expected for Punjab State.
Pl advice
My query is when I bring the material from outside state by paying my C form, what will be VAT / Composite VAT liablity as rates are combined.
Also in same order there are few items which are free issue by client for installation. What should be service tax applied.
My order is all inclusive.But client wants taxable invoice for VAT and service tax.I want the most economical option, to pay minimum required taxes.
Simillar order is also expected for Punjab State.
Pl advice
21 May 2012
Mr Author,
In almost all the states composition of tax on works contract is not permitted for interstate contracts and also when you make interstate purchases for this purpose.So you have to raise the bill on the entire amount,but charging at applicable rates on the material contents only.Suppose your bill is for Rs5 laks,consisting of 70% material and 30% labour and expenses.You can charge @ 12.5% on Rs3,50,000/- and @12.6%s1,50,000/-.
Under ST composition rate is also available,but,in this case it may not be benificial....MJK
In almost all the states composition of tax on works contract is not permitted for interstate contracts and also when you make interstate purchases for this purpose.So you have to raise the bill on the entire amount,but charging at applicable rates on the material contents only.Suppose your bill is for Rs5 laks,consisting of 70% material and 30% labour and expenses.You can charge @ 12.5% on Rs3,50,000/- and @12.6%s1,50,000/-.
Under ST composition rate is also available,but,in this case it may not be benificial....MJK
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