Service tax on labour charge

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This query is : Resolved

Rajiv (Querist)

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

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)

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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Rajiv

Rajiv (Querist)

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

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)

24 February 2016 No service tax need to be paid on material value. For material value only abatement is allowed.

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Rajiv

Rajiv (Querist)

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

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)

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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Rajiv

Rajiv (Querist)

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

Rajiv

Rajiv (Querist)

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

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)

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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