We have given a contract for construction of a building. As per the contract, few items are purchased by us like steel & cement and few items are used by contractor himself like bricks, sand, tiles etc. Contractor raises a combine bill including his charges and material used by him.
Please advise whether this service will be falling under "Construction of Building" or "Works Contract Service".
Thanks to all in advance.
It would be a Works Contract Service wherein you have an option to pay service tax under Composition Scheme @ 4.12% of the Gross Value of Service provided.
Gross Value of service provided includes cost of service + value of goods used exclusive of Local Sales Tax & VAT.
Regards
Prateek
Inorder to cover the service under Works Contract Service , transfer of property in goods involved in the execution of such contract is leviable to sales tax.
Thanks Friends.
Can you please also let me know about valuation and abatement (if any) if not opt the composition.
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