St on contract of original work

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Querist : Anonymous

Querist : Anonymous (Querist)

19 December 2015 Dear experts
I am individual contractor of original work , the contract value was 30 lacs included materials. Plz clarify how much ST should i charge on this contract value however service receiver is pvt. Ltd. Company..

Regard
Manoj Thakur

CMA Ramesh Krishnan

CMA Ramesh Krishnan (Expert)
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19 December 2015 What is the nature of contract?. if in the contract the value of material and other labour works clearly mentioned then you charge service tax on only the value of other labour works

Querist : Anonymous

Querist : Anonymous (Querist)

19 December 2015 Sir, this contract is constructing flat, materials and labour will be mine...

Querist : Anonymous

Querist : Anonymous (Querist)

19 December 2015 Sir, this contract is constructing flat, materials and labour will be mine...

CMA Ramesh Krishnan

CMA Ramesh Krishnan (Expert)
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19 December 2015 I assume, the billing will happen based on mile stone, you can segregate the material and labour separately and only charge the service tax on labour bill. incase civil works which cannot segregate the labour and materials you can make the ratio 60:40 or 67:33 ratio accordingly you can charge service tax on 40% or 33% portion.

Querist : Anonymous

Querist : Anonymous (Querist)

19 December 2015 Sir, many thanx for your valuable reply, can we charge ST on 33% value of contract instead of 40% if yes in which cases plzz clarify..

CMA Ramesh Krishnan

CMA Ramesh Krishnan (Expert)
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19 December 2015 Under which category you are register under service tax?

Querist : Anonymous

Querist : Anonymous (Querist)

19 December 2015 Under work contract

CMA Ramesh Krishnan

CMA Ramesh Krishnan (Expert)
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19 December 2015 (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;

Querist : Anonymous

Querist : Anonymous (Querist)

19 December 2015 Thanks sir.... one more query, in my case ST will be payable on 40% of contract value, but in my case RCM will be applicable also so 50% ST will be payable by service receiver, plzz confirm should i charge ST on 20% value of contract and balance 20% will be payable by service receiver..
Plzz clarify...

CMA Ramesh Krishnan

CMA Ramesh Krishnan (Expert)
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19 December 2015 Yes. you can charge the same and indicate in invoice the RCM balance 20% payable by the service receiver

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