Service Tax on construction

Dear Sir / Madam

My self Bharat Prajapati, Accounts Manager of Bhumi Construction. At present we received a Contract from ONGC Ltd. regarding construction of Auditorium for the purpose of ONGC staff. it is a tunkey project. i have some doubt on following question.

1) Is Service Tax applicable on construction of auditorium building?

2) The ONGC will hold our 12.36% of service tax from bill if we will not paid service tax is it right?

3) The ONGC hold 12.36 % instead of 10.30% due to the whenever tender prepared the rate of service tax was 12.36% if we paid service tax @ 10.30% they hold 2.06% of difference from our bill, is it right?

you are requested to solve my query at the earliest.

Bharat Prajapati

hi bharat

Case 1

Service tax is applicable @ 10.3% if u r supplying the labour only for construction
If u r using your material and also supplying the labour then WCT is charged @ 4%

Case 2

it depends on the contract b/w u & ONGC

But look if ONGC will hold ur payment then how can u pay the service tax as service tax is paid on the payment received on services done.

Case 3

Service tax is liable only on the receipt of payment, therefore service tax @ 10.3% should be charged.

No ONGC has no right to hold 2.06%

Also U r liable for service tax not ONGC so matter of payment or how much is paid is related to u

If u r paying less then u will be liable for penalty not ONGC