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Service Tax Query

23 December 2009

Hello ,

We have a tender for construction of Rs. 200000 and We have purchased Material for Rs. 120000, On which amount service tax will be imposed Rs. 200000 or On Rs. 80000.

Thanks In Advance

Hoping for Sooner and positive response.

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6 Replies

VINAYAK (Article assistant) (26 Points)
Replied 23 December 2009

SInce you have just received the tender for an construction, i dont think you have any service tax liability

Either you should have received any advance from them or received in full for the bill raised on them

Moreover you have unutized ser.tax.input credit for your purchases

I am not so confident senior..

Madhukar N Hiregange (Chartered Accountant) (38934 Points)
Replied 23 December 2009

If the same is commercial construction then you are liable under works contract. You have 2 choices

You can pay 4.12% on the gross amount or you can pay 10.3% on the value of the full cotract less that which is offerred for VAT. Ex. If VAt is being paid on 70% of the value then 30 x 10.3%.

CA Sumit Arora (CA) (1410 Points)
Replied 23 December 2009

Thank you sir for your support.

BIJAY KUMAR RUNGTA (CA FINAL STUDENT) (85 Points)
Replied 23 December 2009

if separate bill has been raised and amount to Rs.120000 and Rs.80000............then service tax will be applicable on Rs 80000 , otherwise sevice tax will imposed on whole amount means on Rs.200000..............