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Works contract service

This query is : Resolved 
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(Querist)
20 September 2012 DEAR ALL,
WE HAVE DONE SOME ROAD PATCH UP WORK IN OUR FACTORY, IN WHICH THE CONTRACTOR HAS USED HIS MATERIAL AND COMPLETED THE WORK.

OUR QUESTION IS WHETHER THIS TRANSACTION ATTRACTS SERVICE TAX UNDER WORKS CONTRACT SERVICE, AND AS A LIMITED COMPANY WHETHER WE SHOULD PAY 50% OF SERVICE TAX OUT OF THIS TRASACTION.

REGARDS,

GAURAV G BADWE
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CA. Vikash Chandra Jaiswal

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CA. Vikash Chandra Jaiswal (Expert)
20 September 2012 Dear Gaurav,
You are liable to pay tax under reverse charge. In the present case Work Contract Service for immovable property applies, and in this case Applicable rate of ST will be 3.708% (after 70% abatement).
50% will be paid by receipient and balance 50% by Service provider.
Earlier constuction of Road was exempt from tax but now it is taxable.
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