Dear All
One of our projects is in works contract. and it is a single work oder including supply. The work order is telling service tax is 4.12% and they will re-imburse the amount after producing chellan.
Now we received some amount and 85% of the amount is supply .Whether we have to pay service tax on 100% or 15%
Somewhere I heard that supply of materials have no applicability of service tax
YOU HAVE RIGHT HEARD THAT THERE IS NO SERVICE TAX CHARGABILITY ON MATERIAL
BUT
SUPPLY OF MATERIAL MAY BE A SERVICE....
THEN MAY BE SERVICE TAX SHOULD BE CHARGED.....
4.12% is charged with materials ( 60% abatement from gross charges for materials only), if we pay on pure service then its 10.3%
So pls tell me how much we have to pay
if its in work contract than you have to pay 4.12 % on amount.
U all pls clearly read my querry and give me a satisfied answer
Dear Ajith,
The rate of 4.12% is a composition rate under Works Contract Service. This means, you need to pay service tax on both service + supply, i.e total value of the contract. In the given scenario, you need to pay service tax on the total amount received for this contract i.e 100%
Thanks,
Ganesh
CAclubindia
