Query about abatement rates

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

07 December 2012 Dear sir/madam,

My client is providing services in the category of "CONSTRUCTION SERVICES IN RESPECT OF COMMERCIAL OR INDUSTRIAL
BUILDINGS AND CIVIL STRUCTURES".
For the Month of October, When he raised the invoices to the company for services provided by his firm, Account department of the company reject the invoice asking to my client to charge service tax on 50% amount. They said that on balance 50%, service tax would be paid by service receiver.
Please clear the rate of abatement for the said service as mentioned above.. Whether 75% - 25% or 50% - 50%..?
Please help me... Its urgent..

CA bhargava

CA bhargava (Expert)
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07 December 2012 In the above case it is not abatement., the provision is the service receiver has to pay 50% of the service tax if the service receiver is a Company., and the service is the Job work., In the above case u need not liable to collect the tax if u r gross receipts is less than 10 lacs for the year.

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Querist : Anonymous

Querist : Anonymous (Querist)

08 December 2012 Please give me the section or notification no under which above provision is covered..

CA Manish

CA Manish (Expert)
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08 December 2012 Link for the notification :-

https://www.servicetax.gov.in/notifications/notfns-2012/st30-2012.htm

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CA CS Amit S. Kedia

CA CS Amit S. Kedia (Expert)
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08 December 2012 Dear Member,

First of all, you are mixing up two different services-
1. works contract service
2. Construction of complex service

In first type of service, 50% of service tax is paid by the service receiver only if you are a firm(partnership or propritorship)and service receiver is comoany/body corporate.

In second type of service, there is no concept of reverse charge and service receiver is not liable for any service tax directly to the dept.
in this case, you will have to charge service tax on 25% of total amount charged i.e 12.36% of (25% of total amount).

So, accordingly, tell to you client that it is not works contract service and we are liable for full amount of serice tax.

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