Confusion in notification no. 30/2012 wct-reg.

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Ram kr.

Buisness

490 Points Posted on 14 June 2013

Dear Experts,

As per service tax notification under reverse charge in respect of services provided or agreed to be provided in service portion in execution of works contract. The liability is define 50% for both service provide as well as receiver.

I am little bit confuse in the end of notification in Explanation-II regarding work contract tax given below:-

Explanation-II. - In works contract services, where both service provider and service recipient is the persons liable to pay tax, the service recipient has the option of choosing the valuation method as per choice, independent of valuation method adopted by the provider of service.

The above explanation create dispute at the time of service tax audit if a service provide or receiver assess the value in lower side. Please clerify.

Thanks

Replies (2)

Mallikharjun

Deputy Manager

354 Points Posted on 17 June 2013

There are two types of works contracts i.e., divisible and indivisible. Divisible contract is a contract where you can bifurcate material portion and labour portion separately. In these contracts, you have to ay service tax only on labour portion. Indivisible contracts are those contracts where you cant bifurcate material and labour portion portion separately and hence you need to take abatement of 40/60/30% based on the type of contract. Pls refer to the notification number 24/2012 S.T.

Regarding your doubt, i think if the supplier is treating the contract as divisible and paid service tax accordingly, you may treat as indivisible and can calculate service tax accordingly. Your valuation of taxable value might be different from what the supplier has valued. But still you can value it as per the explanation II provided in the notification.

This is purely my opinion.

DILIP KUMAR MONDAL

advocate

30 Points Posted on 20 April 2015

sir , i am w/contractor but i have no any work done this half year than i fill nill return but i confuse notification no,and serial. no so please suggestion me