Changeability of Service tax and VAT

owners of building going in for addition and alteration of area of their flats.(addl. fsi) thru works contract to a civil Contractor. Do the owner need to pay service tax and vat if yes then at what rates. the contracts present quotation states VAT @ 8% on gross value and ST @ 10.5%. He says he had charged on composite basis which we think it would be wrong as vat should be charged on materials & goods and ST on labour services. Please advice a proper right way out.Tks.