Service tax on construction company

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This query is : Resolved

KAVITTHA HEMATHRI (Querist)

21 October 2012 Dear Sir / Madam,

for 100% Contract bill (construction work)

Can we charge Service tax on 40% of the contract value since we buy materials for the work

If Service tax can be charged on 40% of contract value, is WCT is chargeable on 100% of contract value or 60% of contract value

Please clarify

Madhukar N Hiregange

Madhukar N Hiregange (Expert)

22 October 2012 Under VAT normally there are 2 schemes.1) Regular scheme where the actual labour/ services canbe deducted at actuals from 100% and another where as per standard rates deduction of labour/ services can be claimed.In this scheme the Input Tax Credit can be availed on VAT paid for material used. 2) Composition scheme where on the whole 100% a lower rate of 4/5 % canbe discharged. No credit of ITC.

Under service tax also if actual labour / services deduction claimed then on the actual ST needs be discharged.
Where on ad hoc basis/ composition under VAT then on 40% for original works.

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