Works contract
This query is : Resolved
P.A. FRANCIS
(Querist)
24 September 2013
Who will pay Service tax on works contract, provider or receiver ? How many percentage has to pay receiver?, Can we take Cenvat Credit?
RENGARAJ R.K
(Expert)
24 September 2013
It has to be paid by both provider and receiver if provider is other than company.
If works contract is meant for company, 50% will be (after abatement) payable by provider and other 50% will be by receiver.
Service tax on works contract is a lengthy subject. Hence, go to valuation rule 2A and you have to apply the % of abatement and you have to see the reverse charge mechanism.
It is based on your VAT valuation, if vat valuation is not ascertainable, go to rule 2A.
If works contract is meant for company, 50% will be (after abatement) payable by provider and other 50% will be by receiver.
Service tax on works contract is a lengthy subject. Hence, go to valuation rule 2A and you have to apply the % of abatement and you have to see the reverse charge mechanism.
It is based on your VAT valuation, if vat valuation is not ascertainable, go to rule 2A.
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