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Service tax liability on works contract

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This query is : Resolved

Krishna Murty (Querist)

31 August 2009 A Contractor executing 10 crores works.Cement and steel was supplied by the main contractor with free of cost worth Rs.5 Crores.what value will be taken as gross value Rs.15 Crores or 10 Crores.kindly clarify

Amit Sheode

Amit Sheode (Expert)

01 September 2009 15 Crs is the value of works contract for the purpose of VAT as also for Service Tax ( if the Service tax is being liquidated under the Composition Scheme)

SARATHY RP

SARATHY RP (Expert)

02 September 2009 Dear Mr Krishna Murthy,

There are two ways in which the service tax liability is discharged as far as Works Contracts Services are concerned (a) NOn-composition and (b) Composition.

As far as non composition method is concerend, the free issue material is out of the taxable value.

As far as the composition method is concerend, consequent to the notification No. 23/2009-ST, dated July 7, 2009, the gross value includes the free issue material.

Thanks.

Sarathy

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