Service tax and vat

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This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

30 September 2012 Hi All,

We are giving service in car showroom as washing with product. Usuall we are charging in 80% ( Vat) and 20% (Service tax).
Any body having the notification about service tax should be in 70% and vat in 30%
Please provide me notification copy

CA Suresh Jain

CA Suresh Jain (Expert)
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30 September 2012 On what basis are you charging service tax on 20%.

The Rules 2A, 2B and 2C of service tax (determination of value) rules 2006 provide for valuation of service portion in works contract, in relation to money changing and involved in supply of foods etc. respectively. Though the works contract is known commercially as the contract where transfer of property in goods alongwith labour is involved but as per definition of works contract section 65B(54) it is restricted to mean a contract wherein transfer of property in goods involved in the execution of such contract is leviable to tax as sale of goods and such contract is for the purpose of carrying out construction, erection, commissioning, installation, completion, fitting out, improvement, repair, renovation, alteration of any building or structure on land or for carrying out any other similar activity or a part thereof in relation to any building or structure on land

In view of this on basis is suggested or provided in the law for the service mentioned by you.

In my opinion the value of the service should be calculated as Gross value of contract minus value of goods involved on which VAT is charged

Querist : Anonymous

Querist : Anonymous (Querist)

01 October 2012 We charging according to the vat notification is 80% vat and 20%service tax

CA Suresh Jain

CA Suresh Jain (Expert)
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01 October 2012 So you continue paying service tax on 20%

Querist : Anonymous

Querist : Anonymous (Querist)

20 September 2014 can i get the explanation about the 80-70 on works on contract

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