Query on service tax chargeable on works contracts

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Accoutant
55 Points Joined April 2009

Sir/Madam,

I am living in Co-Op Housing Society Ltd. My society wishes to carry out Renovation/Repair Work of tiles, painting ,replacement of pipes and other civil works.The Total Contract Value is Rs. 35 lacs. The material cost is Rs. 18 lacs and VAT Paid will be Rs. 2 lacs.The Contractor is a Propreitory Concern. 

What will be Service Tax charge on us ? Whether Rule 2A Option I is beneficial or Option II is beneficial ??? Whether in Option I and II CENVAT Credit is available or not ?

Please forward Calculation under both the Options.

Chandresh Sheth

 

 

 

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On 25 January 2017 at 17:35 Report
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Chartered Accountant
1948 Points Joined October 2012

Option 1. On actuals

Labour portion 15 lakhs (Gross value 35 L less Material 18L less VAT 2L) - assuming 35 L is inclusive of all.  

Service tax: 15L/115%*15% = 1,95,652/-

Option 2. On 70% of the value (Since not original works contract - effctive rate 10.5% (15%*70%))

Total contract value  = 35 Lakhs

Assessable value = 33 lakhs (35 less VAT 2L)

Service tax: 3,13,575/- (3300000/110.5%*10.5%)

Cenvat credit eligible on ST paid for repairs services - litigated by department

 

 

 

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On 27 January 2017 at 16:18
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Chartered Accountant
1948 Points Joined October 2012

Alternatively you could compute on exclusive of ST basis. 

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On 27 January 2017 at 16:19


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