Query on vat

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Sir,

Pls. help me in clarifying my query.

We have engaged a contractor for making boundary wall, He has made the boundary wall (provided his material and service)and charged 4 % VAT on 80% of total contract amount and Service tax @ 12.36% on 20% of total contract amount (as mentioned in Work Order given to him).

In my view service tax should be charged @ 12.36% on 40% of total contract amount as its a new work and as he is a propreitorship firm he will charge only 50% and balance 50% service tax to be paid by us i.e. Service Receiver. pls. confirm whether it is correct or not.

Regarding Vat how much amount he will charge and on what portion.

further, in WCT how much we will deduct as TDS?

Waiting for your reply, Thanks in advance

Regards

Niraj

Replies (1)

Dear Mr. Niraj,

I am agree with you on Service tax Matter, if Service provider providing Services as well as material then it will comes under the Work Contract Tax and Service Tax will be charged 4.944% on whole amount i.e 40% X 12.36%,

But if Service portion are ascertainale then we will Charge Service tax on only service portion.

Deduct TDS on Gross Bill Value @ 2%

 


CCI Pro

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