Service tax on works contract...
This query is : Resolved
18 November 2014
Dear Sir,
Please help me solve a confusion on Service Tax Rate applicable to Works Contract.
Our company has given a contract for the interior works to be done on the recently constructing building.
As per the quotation received from the party, rate of Service Tax is 8.652% ie 70%*12.36%.
Is it correct ? Can we classify the work as original contract and claim tax @ 4.944%.
Please advice.
Thanks and Regards,
CA Sajana E V
Please help me solve a confusion on Service Tax Rate applicable to Works Contract.
Our company has given a contract for the interior works to be done on the recently constructing building.
As per the quotation received from the party, rate of Service Tax is 8.652% ie 70%*12.36%.
Is it correct ? Can we classify the work as original contract and claim tax @ 4.944%.
Please advice.
Thanks and Regards,
CA Sajana E V
18 November 2014
You can classify it under original works and claim tax @ 4.944%.
18 November 2014
Thank you Sir...
Sir, the party is still insisting on 8.652% rate by poitning out a notification issued by ST Dept which is summarised as follows :
b) If value of materials are NOT separately Known :
• In case of ORIGINAL WORKS _ Value of
Service = 40% of the Gross Amount received
• In any other case Value of Service = 70% of the Gross Amount received
Sir, the party is still insisting on 8.652% rate by poitning out a notification issued by ST Dept which is summarised as follows :
b) If value of materials are NOT separately Known :
• In case of ORIGINAL WORKS _ Value of
Service = 40% of the Gross Amount received
• In any other case Value of Service = 70% of the Gross Amount received
18 November 2014
Please check the following fit it to the correct classification.
(A) in case of works contracts entered into for execution of original works, service tax shall be payable on forty per cent. of the total amount charged for the works contract;
(B) in case of works contract entered into for maintenance or repair or reconditioning or restoration or servicing of any goods, service tax shall be payable on seventy percent. of the total amount charged for the works contract;
(C) in case of other works contracts, not covered under sub-clauses (A) and (B), including maintenance, repair, completion and finishing services such as glazing, plastering, floor and wall tiling, installation of electrical fittings of an immovable property , service tax shall be payable on sixty per cent. of the total amount charged for the works contract;
(A) in case of works contracts entered into for execution of original works, service tax shall be payable on forty per cent. of the total amount charged for the works contract;
(B) in case of works contract entered into for maintenance or repair or reconditioning or restoration or servicing of any goods, service tax shall be payable on seventy percent. of the total amount charged for the works contract;
(C) in case of other works contracts, not covered under sub-clauses (A) and (B), including maintenance, repair, completion and finishing services such as glazing, plastering, floor and wall tiling, installation of electrical fittings of an immovable property , service tax shall be payable on sixty per cent. of the total amount charged for the works contract;
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