Rate of service tax on works contract service
This query is : Resolved
28 May 2016
Dear Sir/Madam,
We are providing works contract service to various clients in tamilnadu. when we will make invoice, our vat rate 70% on total value as per tnvat rules and service tax rate 40/60/70 % on total value as applicable. Now our client asking, you are paying vat on 70% value and service tax on 40/60/70 % value, which is does not match. So my question is what vat & service tax rate i should follow ? Because if we calculate total percent then it will come 100% above. Request you to kindly reply me.
Thanks in Advance.
We are providing works contract service to various clients in tamilnadu. when we will make invoice, our vat rate 70% on total value as per tnvat rules and service tax rate 40/60/70 % on total value as applicable. Now our client asking, you are paying vat on 70% value and service tax on 40/60/70 % value, which is does not match. So my question is what vat & service tax rate i should follow ? Because if we calculate total percent then it will come 100% above. Request you to kindly reply me.
Thanks in Advance.
CA S K MISHRA
(Expert)
29 May 2016
In case of works contract, the VAT & Service tax is calculated as under :
Basic price (A) xxxxxxx
Add. VAT as applicable on (A) xxxxxxx
Add : Service tax on (A) ( on 40/60/70% value) xxxxxxxx
Sub Total ( Basic + VAT +ST ) xxxxxxx
Add : Building/Const cess (if applicable) xxxxxxx
Gross Total Bill xxxxxxx
Basic price (A) xxxxxxx
Add. VAT as applicable on (A) xxxxxxx
Add : Service tax on (A) ( on 40/60/70% value) xxxxxxxx
Sub Total ( Basic + VAT +ST ) xxxxxxx
Add : Building/Const cess (if applicable) xxxxxxx
Gross Total Bill xxxxxxx
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