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mohsin balwa (Querist)

16 April 2017 we are the contractor and we are taking contract from developers at the time of raising the bill to the developers I am calculating service tax on basic sale amount and vat is on basic + service tax amount for expample :- total construction cost is :- 100000 service tax @ 40% :- 40000 total ;- 140000 Vat @ 5% :- 7000 gross receivable 147000 is it a correct method to calculate vat? please help me thanks

MJ Krishnamurthy

MJ Krishnamurthy (Expert)

16 April 2017 Mr Balwa: There is a point. Whether you are collecting VAT and ST in your bills or not. Now if the work value is Rs1L the amount taxable for ST is 40% of it ,i.e.Rs40,000-00. For Ex: ST rate is 15%.So,ST chargeable here is 15% of Rs40,000-00=Rs6,000-00.VAT is chargeable @5%,you say,i.e. composittion rate, which is equal to 5,000-00.Your bill should be for Rs1,00,000-00+Rs6,000-00+Rs5,000-00=Rs1,11,000-00......mjk

mohsin balwa

mohsin balwa (Querist)

16 April 2017 thanks you sir for your valuable advice

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