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.
CA.Sourabh Sethia
(Expert)
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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