service tax on interior decorator

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CA. SUNIL KR. KHANNA (Querist)
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02 April 2009 Hi
A propreitorship firm of interior decorator raised bill of 10000( material & Labour) then added vat say 2% i.e. 200 = 10200 . then add designing & drawing charges say 4%( on 10000) i/e.400 and then charges service tax 10.3% (on 400) i.e. 41 and service tax of Rs. 41 is deposited with Dept.
is this correct , if not pl. inform correct procedure

CA. B.SRINIVASULU

CA. B.SRINIVASULU (Expert)
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02 April 2009 if you combine material and labour in one bill without differentiating what is material and what is labour and then as per service tax you have to pay on total bill at a composite rate of 4%.

If bifurcation is there then on service you can pay 10.3% and get exemption for the materials.

Designing and drawing charges is correct.

CA.Hanumantha Reddy

CA.Hanumantha Reddy (Expert)
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02 April 2009 As you said Rs 10, 000 includes both material and labour, the labour portion is also liable for service tax. Further, if you are able to identify the amount of labour involved in this regard then it is not liable for VAT and the same amount is chargeable under service tax law.
Thus, you have to charge service tax on labour portion along with designing and drawing charges.
hanumatha@gmail.com

CA.Hanumantha Reddy

CA.Hanumantha Reddy (Expert)
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