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One contractor raisng a invoice and charge VAT to a manufacturing company for construction of boundary (contract with material and labour) following veiw is required from CA club member
(1) can be a contractor raised the invoice with VAT (He has VAT registeration )
(2) If he can raised invoice with VAT, it is also applicable to service value
(3) can be take vat credit
(4) what will be rule applicable to service value
under service tax it will be covered under the definition of original works and will be entited to 60% abatement on entire value.
(1) can be a contractor raised the invoice with VAT (He has VAT registeration )- Yes since material are involved
(2) If he can raised invoice with VAT, it is also applicable to service value- Yes, service tax also needs to be paid as it is a composite contract
(3) can be take vat credit - i am not very sure about this
(4) what will be rule applicable to service value- if covered under original work contract, service tax shall be payable on 40% of the value,
Gupta Sachdeva & Co. Chartered Accountants
New Delhi
CA Final
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CAclubindia
