Work Contract Service

This query is : Resolved

Pawan Agarwal (Querist)
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02 January 2011 I AM ENGAGED IN THE BUSINESS OF CIVIL AND ERECTION COMMISSIONING & INSTALLATION SERVICES

1.I RECEIVED ONE ORDER REGARDING CIVIL WORK FORM MY CUSTOMER FOR WHICH I ADOPT WORK CONTRACT COMPOSITION SCHEME.

THE SAME WORK I AM SUBCONTRACTING TO OTHER COMPANY.

I WANT TO KNOW CAN I COMPELLED THE SUBCONTRACTOR TO ADOPT THE COMPOSITION SCHEME FOR THE CIVIL WORK OR WHETHER HE IS FREE NOT TO ADOPT THE SAME AND PAY TAX @10.3%

2 IF HE IS FREE FOR NOT ADOPTING COMPOSITION SCHEME AND PAY SERVICE TAX @10% THEN CAN I TAKE THE CREDIT FOR THE SAME FULLY OR WHETHER IT IS RESTRICTED TO 4% AS MY CONTRACT WITH CUSTOMER AND I AM ADOPTING COMPOSITION SCHEME AS INSIST BY CUSTOMER AS BENEFICIAL

3. CUSTOMER ALSO PROVIDE ME MATERIAL SUCH AS STEEL AND OTHER T&P FREE OF COST OR SOME MATERIAL CHARGEABLE BASIS, I WANT TO KNOW WHETHER THE COST OF SAME IS TO BE INCLUDE IN THE VALUE OF WORK DONE FOR THE PURPOSE OF SERVICE TAX UNDER COMPOSITION SCHEME OR IF YES THEN PLEASE GIVE THE REF. OF CIRCULAR.

THANKS

CA Shailesh Kumar Bhagat

CA Shailesh Kumar Bhagat (Expert)
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02 January 2011 1. Uou cannot force your sub contractor to adopt shame scheme.

2.No , restriction on input credit.

3. Yes free issue material is to be included under compostion scheme calculation of tax.

Bhaskaran Chackrapani Warrier

Bhaskaran Chackrapani Warrier (Expert)
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02 January 2011 Regarding service tax on material supplied by awarder at free of cost, pl refer notifications 32/2007 dated 22/5/2007 as amended by notification 23/2009 dated 7/7/2009 meaning thereby it is liable to service tax.

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