Work contract
This query is : Resolved
01 April 2016
Dear Experts,Please let me know how to handle service tax liability in work contract. As we have received invoice from vendor for Material Rs.36600 & Labour Rs.24400/- Service Tax @14.5% is Rs.8845/- and CST 2% Rs.732/- total invoice amt Rs.70577/-. Can any one tell me is this correct.Please reply asap.
01 April 2016
NO its wrong he has charged Service Tax on full amount of charged amount i.e. RS.61000/-
but as per the Service Tax Provision if the service portion is known then the ST will be charged only on 24400/-
or if the same is not known then also the same is not charged on the full amount instead the same is payable on the basis of composition scheme i.e. 40%/70%/30% as the case may be (which is not there in your case)
Material 36600/-
Labour 24400/-
CST 732/-
ST 3538/-
TOTAL 65270/-
but as per the Service Tax Provision if the service portion is known then the ST will be charged only on 24400/-
or if the same is not known then also the same is not charged on the full amount instead the same is payable on the basis of composition scheme i.e. 40%/70%/30% as the case may be (which is not there in your case)
Material 36600/-
Labour 24400/-
CST 732/-
ST 3538/-
TOTAL 65270/-
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