Matter of work contract

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This query is : Resolved

Guest

Guest (Querist)

31 October 2012 good evening sir,
i want to ask you about service tax on work contract. supoose we give a contract manoj contruction co.than sir when he will raised bill . than sir 1- he will add service tax 40% on material bill (execution of original works) as per changes from 1.07.2012 . 2-i will deduct 4.8%wct in his material bill. sir hare are example supoose material bill exclude service tax is 20 lakh 20 lakh*40/100=800000 800000*12.36/100=98880 this service tax amount he will add in their material bill. i will deduct wct 4.8% in this material bill. sir this service tax amount 98880 deposited 50% by service provider and 50% deposit by service receiver. sir please chaeck and sir reply sir

MOHAMMAD SALIM

MOHAMMAD SALIM (Expert)

31 October 2012 Yes in event of work contract bein "original work" service tax of Rs 49,440/- will be paid by service reciepient directly to Govt. Further Rs 49,440/- will be paid to the service provider.....

Anil Verma

Anil Verma (Expert)

31 October 2012 my understanding about your query is as below:
1. Contractor is raising bill for work executed and adding 50% of applicable service Tax i.e. 12.36% of the 40% invoice value.
2. your gross amount payable is hence value of work executed and 50% of service tax.
3. you are deducting WCT on the above two amount.
4. you will pay net amount (1+2-3) and 50% of service tax payable to the Govt. A/c

If you are following above than it is correct.