my client is a partnership firm. it is raising bills for sale and service separately to its clients. the nature of work is sale of equipment and erection, installation and commissioning of supplied equipment.
Client is paying vat directly on sales. regarding service tax on how much portion service tax is to be paid and at what rate.
Please provide detailed explanation.
Your client has 2 options.
1. pay service tax on service portion under rule 2A(i) of Service tax (Determination of value) rules, 2006
2. If value is not determined under option 1, pay service tax under rule 2A(ii) of the said rules on total amount
However, credit of inputs is not available in the second option. Further, credit of input services also not available except it is received for specified services (see the definatin of input services).
In second option, service tax is payable on 40% of total amount charged if it is for original works otherwise it would be 70% of total amount charged.
| Originally posted by : Krishna Prasad | ||
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my client is a partnership firm. it is raising bills for sale and service separately to its clients. the nature of work is sale of equipment and erection, installation and commissioning of supplied equipment. Client is paying vat directly on sales. regarding service tax on how much portion service tax is to be paid and at what rate. Please provide detailed explanation. |
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Refer 2A
https://www.cbec.gov.in/resources//htdocs-servicetax/st_determtn_value_rules.pdf
portion is 50 : 50 = SR:SP
Regards
Karanjit Singh | +91-7503588224
CAclubindia
