Works contacts services
This query is : Resolved
Guest
Guest
(Querist)
30 July 2012
Dear Expert, Kindly provide me all such relevant details about taxability of Work Contract Service.
Composition Scheme is optional or mandatory, Abatement (if any), Rate of Service Tax.
Composition Scheme is optional or mandatory, Abatement (if any), Rate of Service Tax.
RENGARAJ R.K
(Expert)
30 July 2012
1) Composition scheme is withdrawn from 01.07.12.
2) New construction = 12.36% on 40% of the total contract value (including labour plus materials) Abatement is 60%
In case if you are filing vat return and showing the value of material cost separately under vat act, then the service tax 12.36% is payable only on the balance value of the contract, i.e labour cost only.
If you are a firm or individual, then under reverse charge mechanism, you need to pay only 50% of taxable turnover on the above working and balance 50% will be paid by the service receiver. Also, Kindly see all the relevant notifications on works contract.
2) New construction = 12.36% on 40% of the total contract value (including labour plus materials) Abatement is 60%
In case if you are filing vat return and showing the value of material cost separately under vat act, then the service tax 12.36% is payable only on the balance value of the contract, i.e labour cost only.
If you are a firm or individual, then under reverse charge mechanism, you need to pay only 50% of taxable turnover on the above working and balance 50% will be paid by the service receiver. Also, Kindly see all the relevant notifications on works contract.
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