Service tax rate for works contractor.

This query is : Resolved

makajan (Querist)
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01 November 2012 Hello Everyone.

I am Works Contractor in Karnataka Electricity Department. and i am recently availed Service Tax Registration NO. so can anyone tell me how i can charge a service Tax on works Contract Bills.
T

CA.Ganesh

CA.Ganesh (Expert)
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01 November 2012 I will try to explain it in simple words
1. First you have to make valuation of service portion in works contract and findout total service tax liability. For that you have different options as under
a. Actual Value of service Calculate value of service on costing plus profit basis deduct value of material on which State Vat is paid, if State Vat is paid on actual value of material (and not under composition scheme) and pay service tax on balance amount This case Service tax will be 'Actual Value of Service x 12.36%
b. Finding value of service as above in case of composite contract like works contract is very difficult.In such cases you can use composition scheme Value of service = Gross amount charged x % prescribed under composition scheme Service Tax liability = Value of service x 12.36%
2. Next findout the service tax liability of service provider and service receiver

ST liability of service provider will be 50% of service tax liability calculated ie, in case of (a) above = Actual ValueX12.36% x 50% in case of (b) above = Gross amount charged x % prescribed under composition scheme x 12.36%x50%

ST liability of service receiver will be same as above