Tds on works contracts when part of material supplied
This query is : Resolved
23 February 2015
Gud Morning Experts!!
Can you please clarify the following doubt in your free time.
Sub-Contract work:
Steel Reinforcement - Cutting, straightening, bending, placing and binding in position, the tor steel reinforcement with 18guage binding wire as per structural drawings etc. complete in all respects including unloading but excluding the cost of binding wire and reinforcement bars of various diameter.
BOQ Eg. => Qty - 100 Ton & Rate Rs 10000 = Total Contract Value Rs 10,00,000/-.
Sub-Contractor R.A.Bill Received As Follows:
Total Work Done As Per BOQ = Rs 10,00,000/-
Add: Cost of Material Supplied by Principal Contractor = 100Ton x Rs 50,000 = Rs 50,00,000/-
Total Value of Contract for the Purpose of Service Tax Calculation Rs 60,00,000/-
Composite Service Tax - 12.36% on 40% of Rs 60,00,000/- = Rs 2,96,640/-
Total Bill Value of R.A. No.1 Rs 12,96,640/- (Sub-Contractor Not considered Cost of Material Supplied by the Principal Contractor for Calculation of Total Bill Value)
Please note that, there were other items too in the BOQ like Earth work Excavation, Cutting &Pile Chipping, Machine Mixed Concrete for Pile Cap, etc. and the contractor is raising single bill for all the item and hence the sub-contractor opted for the composite scheme. Work order is also given for all the items in Single Work order. Only steel is purchased and supplied by the Principal Contractor. Please also note that it is not a Job Work.
Now the Queries are:
1. Is Cost of Material Supplied by Principal Contractor to be Added to Work done value for calculation of Service Tax though it is specifically excluded from Contract?
2. On Which amount TDS is deductible?
Please guide me to proceed for accounting of sub-contractor bills.
Can you please clarify the following doubt in your free time.
Sub-Contract work:
Steel Reinforcement - Cutting, straightening, bending, placing and binding in position, the tor steel reinforcement with 18guage binding wire as per structural drawings etc. complete in all respects including unloading but excluding the cost of binding wire and reinforcement bars of various diameter.
BOQ Eg. => Qty - 100 Ton & Rate Rs 10000 = Total Contract Value Rs 10,00,000/-.
Sub-Contractor R.A.Bill Received As Follows:
Total Work Done As Per BOQ = Rs 10,00,000/-
Add: Cost of Material Supplied by Principal Contractor = 100Ton x Rs 50,000 = Rs 50,00,000/-
Total Value of Contract for the Purpose of Service Tax Calculation Rs 60,00,000/-
Composite Service Tax - 12.36% on 40% of Rs 60,00,000/- = Rs 2,96,640/-
Total Bill Value of R.A. No.1 Rs 12,96,640/- (Sub-Contractor Not considered Cost of Material Supplied by the Principal Contractor for Calculation of Total Bill Value)
Please note that, there were other items too in the BOQ like Earth work Excavation, Cutting &Pile Chipping, Machine Mixed Concrete for Pile Cap, etc. and the contractor is raising single bill for all the item and hence the sub-contractor opted for the composite scheme. Work order is also given for all the items in Single Work order. Only steel is purchased and supplied by the Principal Contractor. Please also note that it is not a Job Work.
Now the Queries are:
1. Is Cost of Material Supplied by Principal Contractor to be Added to Work done value for calculation of Service Tax though it is specifically excluded from Contract?
2. On Which amount TDS is deductible?
Please guide me to proceed for accounting of sub-contractor bills.
23 February 2015
1. If you opt for composition scheme material supplied by principal contractor has to be added.
2. TDS is to be deducted on the gross value of the bill excluding service tax.
2. TDS is to be deducted on the gross value of the bill excluding service tax.
23 February 2015
Sir,
Can I request you to elaborate your answer and explain me with the figures in my illustration.
Can I request you to elaborate your answer and explain me with the figures in my illustration.
23 February 2015
If you opt for without compounding the service tax will be payable on 10,00,000 @ 12.36% = 1,23,600. Tds is applicable on 10,00,000 only.
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