Vat & service tax on interior works

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Mohd Sarfaraz Latibani (Querist)

26 December 2013 I have a taken a contract for a local company in Andhra Pradesh, for Interior & Finishing works. The Contract amount is Rs.10 Lakhs (including material and labour cost). I want to know what will be the VAT and Service Tax Liability and how is it calculated.
It is not possible to separate the Material and Labour Cost.
1.How VAT & Service Tax is Calculated?
2.Whether Input Tax Credit allowed on materials purchased?
3.Whether Input of Service Tax is allowed?

@VaibhavJ

@VaibhavJ (Expert)

26 December 2013 Hi

The options under ST are:
1. Pay 4.12% on gross value under composition.

Credit of CED on capital goods + Service tax credit on eligible input services wouldbe available.

2. Pay ST on 33% and VAT as per local VAT law. No credit available.

3. Pay VAT on actual materials transferred and pat ST on balance: if VAT paid on 65% then pay ST on 35% under Not. 12/2003. Credit on Capital Goods / Services available.

Thanks//VaibhavJ

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