Service tax liability under works contract service

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This query is : Resolved

CMA CS C. B.Prabhumirashi (Querist)
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15 December 2014 I would like to have a reply from experts about the above subject.

The details are as under.
My company is into providing a Works Contract Service in construction business. It also provides labour for such activity. My company is under Composition Scheme for paying up its service tax liability under the above category of sevice.

There are separate Work Orders for - providing Labour to the Site as well as for providing Works Contract Service.

My company is charging & paying Service Tax on Labour charges bills at 12.36%, and on Works contract bills at 4.944%.

Actually both these Services are being provided to the one & same construction site (i.e. Manpower Supply Service for labour provided & Works Contract Service for Construction of the Project Site).

The construction of the project will not be completed if both these types of services are not provided.

Now my queries are that -

1. Whether Service Tax can be levied at 4.944% on the bills (even on Labour Charges Bills) under "Taxability of Bundled Services"?

2. Further if the answer is in negative for the above question, can it possible for my company to prepare One Combined Work Order of providing Labour as well as Works Contract to the construction site to reduce the Service Tax liability?

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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15 December 2014 1. If it is a contract for both material and labour you can charge at 4-944% on labour charges.

2. You can combine and enter in to a single works contract order.

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