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Over laping of Works Contracts with ECI ser etc
Befor Works Contract services in Service Tax Act, if we are giving Service order along with material supply under Errection, commision & Insulation services & Commercial construction services we got abatment of 67% on contract value, service tax paid on 33% @ 12.36% i.e 4.08%. But as per Works Contract services the rate is 2.06%. Now ECI & Commercial construction service along with material satisfy the Works Contract service, we are liable 4.08% or 2.06%. My question is any specific methodology for Separating the ECI, Commercial Construction services along with material and Works Contract Services? Pls, Urgent Ph: 099891 57666 Email : nageswararao.bommakanti @ ril.com Land Ph: 0884 2388343.
Replies (3)
It is on the service provider to opt for payment either on 2.06% or 4.08%
For 2.06% the value for taxing is the gross amount
Look at the following 3 options under the act
“Contractor has the following option to exercise
OPTION-I Composite rate-Service tax payable @ 2% of the gross amount charged (excluding VAT) (No Cenvat credit)
OPTION-II Vivisection of composite contract into goods and services
OPTION-III Pay Service tax on Gross Amount charged and take Cenvat credit on inputs
As an auditor of Contractee shall I raise question on Issuing Work order to contractor @ 4.08% instead of 2.06% in the point of Saving to Company
If you intend a saving option 3 is best to be exercised
You may accordingly work out the difference
You may accordingly work out the difference
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