Mobilisation Advance and supply in service tax

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

Replies (6)

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

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