Service tax on labour charge
This query is : Resolved
24 February 2016
good morning expert,
we hired a contractor for work contract (aluminium partition make) i want to know that will service tax applicable on labour charges as per reverse charges( 70 % for repairing)
bill detail given below
material value = 75000
vat @13.5% = 10125
total bill = 85125
saprate bill for labour charge amount 39000
plx told me that will i deposit 70 % service tax on labour charges value.
plz
we hired a contractor for work contract (aluminium partition make) i want to know that will service tax applicable on labour charges as per reverse charges( 70 % for repairing)
bill detail given below
material value = 75000
vat @13.5% = 10125
total bill = 85125
saprate bill for labour charge amount 39000
plx told me that will i deposit 70 % service tax on labour charges value.
plz
24 February 2016
Pay service tax at 14.5% on 100% on labour charges. Service tax on 70% payable on total value.
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24 February 2016
THANKS FOR YOUR REPLY SIR,
BUT SIR SERVICE TAX SHOULD BE DEPOSIT IN LABOUR CHARGES OTHER BILL ARE MATERIAL PURCHASE BILL.THEN WILL I DEPOSIT SERVICE TAX ON MATERIAL BILL OR LABOUR CHARGES
BUT SIR SERVICE TAX SHOULD BE DEPOSIT IN LABOUR CHARGES OTHER BILL ARE MATERIAL PURCHASE BILL.THEN WILL I DEPOSIT SERVICE TAX ON MATERIAL BILL OR LABOUR CHARGES
24 February 2016
No service tax need to be paid on material value. For material value only abatement is allowed.
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24 February 2016
sir is this calculation is correct
material supply by service provider
service tax on labour charges
14.5*70/100*50/100=5.075%
39000*5.075/100=1979
material supply by service provider
service tax on labour charges
14.5*70/100*50/100=5.075%
39000*5.075/100=1979
24 February 2016
This calculation is not correct, for labour charges no abatement allowed. The correct working is 14.5*50/100=7.25%.
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24 February 2016
sir can you tell me only that which amount service tax will be payable 70%
material value 75000
vat 10125
total value 85125
material value 75000
vat 10125
total value 85125
24 February 2016
SIR THIS CALCULATION IS OK
MATERIAL VALUE = 75000
VAT = 10125
TOTAL BILL = 85125
ABATEMENT @ 30 = 22500
BALANCE AMT.(70%)=75000-22500=52500
SERVICE TAX ON 70% VALUE 52500= 52500*14.5/100*50/100=3806.25 WILL BE PAID BY SERVICE PROVIDER AND ALSO PAID BY SERVICE RECEIVER.
PLZ SIR REPLY IF I AM WRONG PLZ CLEAR MY DOUBT
MATERIAL VALUE = 75000
VAT = 10125
TOTAL BILL = 85125
ABATEMENT @ 30 = 22500
BALANCE AMT.(70%)=75000-22500=52500
SERVICE TAX ON 70% VALUE 52500= 52500*14.5/100*50/100=3806.25 WILL BE PAID BY SERVICE PROVIDER AND ALSO PAID BY SERVICE RECEIVER.
PLZ SIR REPLY IF I AM WRONG PLZ CLEAR MY DOUBT
26 February 2016
No service tax payable on material value if the bill value is separately charged for material. Only in case of combined bill value abatement applied.
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