Notification No. 12/2003 ST

Hi,

Service tax is tax on services. Therefore by virtue of this notification, if any goods or material is also sold along with the rendering of service, then no service tax shall be leviable on the value of goods so sold.

can u explain with a numerical example...

i am not able to understand the concept of abatement....

is it connected to this?

Alex in case of work contract u have two option.

Pay ST @ 4% on total Contract Value (In that case cenvat is not available on input i.e. excise duty paid on input used bt you can take cenvat of input services and CG.

Pay ST @ 10% on services only and take credit of all things 

Hi

akr right.

In works contract service there are several options for valuation as under:

1. Compostion @ 4.12% [ on gross amount]

2. Payment on gross amount @ 10.3% [ avail credit of inputs, input services + capital goods]

3. Not 12/03. A. Paying state VAT on say 70% claiming deduction of 30% as labour. In this case pay ST on 30% claiming 70% is cost of goods sold.

B. Calculate the entire goods transferred in the WC and claim that amount say 63% as deduction and pay ST on 37%.[ this is based on the decision of Shilpa colour labs and others which state that on the value of goods transferred ST should ntobe charged.

Dear Madhukar N Hiregangeji,

I just wish to know can a person avail the benefit of Notification No.12/2003 & Notification No. 06/2005 simultaneoulsly?

Many Service Providers are confused & are also getting Show Cause Notice which are actually a small service providers but by reason of such contract they are facing difficulties from the side of Department?   

Please help if you are having any decisions or justifications if one can avail the benefits of both the Notifications. 

Awaiting your reply..