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Computation of service tax in case of works contract

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29 April 2017 We are Civil Contractors, dealing in Govt. Contracts. We get reimbursement of Service Tax from Govt. Department on the strength of challans deposited. Govt. deptts. are computing & reimbursing Service Tax to us after deducting the amount of state vat (Works Contract Tax) form the amount of Gross Bill for work done,e.g., for Rs. 100/- bill they are first deducting Rs. 4/- of WCT & on balance Rs. 96/- they are reimbursing us the service tax after considering applicable abatement. My Query is, whether the computation method adopted by govt. deptt. is valid & correct in terms of Service Tax Law?
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CA R SEETHARAMAN

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CA R SEETHARAMAN (Expert)
29 April 2017 Computation method is not right. They should consider Rs 100.
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