invoice amount 100
works contract tax 5
totol bill amt 105
In above bill amount both value material and service charges are there, but we can,t differentiative howmuch portion is related to material and service chaaarges.
please clarify me, what is service tax liabillty under Reverse charge mechanisim andd tell me journal entrt for the same in the viem service receiver.
As per Rule 2A of Service Tax(Determination of Value) Rules, 2006,
In case, the bifurcation of Material & labpour component is not possible, then the Service tax be charged @ 12.36% on the following percentages of total amount charged:
1) Original Works------40%
2) Repair/maintenance/restoration of goods----70%
3)Other Works contract------60%
And accordingly, 50% of total tax liability(as computed above) shall be borne by Service receiver, only if the service provider is a non-body corporate & the service receiver is a body corporate.
Sumit ji,
It is metioned there such work contract service is provided to a business entity registered or body coporate. Then Individual (Propietor) is allowed to charged 50% tax with the bill amount. Here I want to know what come under to body corporate registered or body corporate.
Plz reply.
SSGS and Associates
Chennai
CA Inter
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