Service tax

Queries 415 views 2 replies

Vivek

Account assistant

37 Points Joined July 2012

Hi frids,

My Residential complex construction company has registered under all taxable services excluding negative list til Jan'13. But we were calculating tax as per works contract provision and taken 60% abatement on consideration on such period. we pay VAT under composition scheme and Calculate service tax on excluding service tax i.e after deducting 2% VAT from consideration and calculates VAT on remaining. For example if consideration is Rs.10000,

1.VAT calculation= 10000 * 2%= Rs.200

2.Service tax = 10000-200 * 40%(abatement) * 12.36% = Rs.485.

was our calculation correct??? can we claim abatement??? Pls some one clarify me.

Replies (2)

Madhukar N Hiregange

Chartered Accountant

39039 Points Joined September 2008

There is no compostion scheme presently applicable. However the vlaution rules provide for payment of ST on 40% if the same is original works. 12.36x 40% is correct rate.

Vivek

Account assistant

37 Points Joined July 2012

Dear sir,

Thanks for your reply. We are paying VAT under composition scheme and Service tax under normal scheme. My Query is we are deducting VAT from the consideration and taking that as a assessable value for Service tax. Are we correct??