kameshkumar (accountant) (25 Points)
01 December 2012Dear Friends,
Any body please clarify my doubt regarding works contract
We are in construction industry. We gave two types of works to same subcontracter with seperate agreement. For one work he is adopting composition scheme for Service Tax calculation and another one he is calculating Service Tax as per non - composition scheme. For both type of work he is mentioning Service category as "Works Contract Service".
CA Pintu Mishra
(Chartered Accountant- Industry)
(514 Points)
Replied 01 December 2012
under composite scheme we used to pay service tax on 40% of the value and we were not allowed to claim cenvat credit of inputs if we opted for it. now the things have been changed now we have to pay service tax on 50% of the value only and rest 50% will be paid by the service receiver. I think he was adopting the compostion scheme prior to these changes and presently he must be doing it non composition basis.
VIJAY ASHWATH
(CA Job)
(22 Points)
Replied 01 December 2012
Dear Mr.Pindhu Mishra,
Thanks for your reply. Mr.Kamesh kumar and me is working in same organisation. What our exact doubt is, Whether the service provider can opt differerent scheme for different agreement. He is submitting bill as per RCM method only . I think by below example you can give your view with more clarity.
As per Agreement 1 (Composition Scheme)
a) Material supply Rs.50000
b)Labour charges Rs.50000
C) Total bill Rs.100000
Service Tax Calculation
12.36% on 40% of the bill value ((100000*40%)*12.36%) = Rs.4944
Service Provider liability (4944 * 50%) - Rs.2472
Service Receiver Liability - Rs.2472
As per Agreement 2 (Non composition scheme)
a) Material supply Rs.50000
b)Labour charges Rs.50000
C) Total bill Rs.100000
Service Tax Calculation
12.36% on Rs. 50000/- (Labour portion only)= Rs.6180/-
Service Provider liability (6180* 50%) - Rs.3090
Service Receiver Liability - Rs.3090/-
Now please tell us, whether he can go for different method ?
Madhukar N Hiregange
(Chartered Accountant)
(39039 Points)
Replied 02 December 2012
| Originally posted by : kameshkumar | ||
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Dear Friends, Any body please clarify my doubt regarding works contract We are in construction industry. We gave two types of works to same subcontracter with seperate agreement. For one work he is adopting composition scheme for Service Tax calculation and another one he is calculating Service Tax as per non - composition scheme. For both type of work he is mentioning Service category as "Works Contract Service". |
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The composition scheme is no longer valid after 1.7.2012. However the option of paying ST on 40% if the same is original works exists.
Alterantively the value of material if bifurcatable and on which value VAT discharged can be deducted. Say on 72% of the value VAT is discharged then ST on 28% is permissible. If not determinable then on 40% for original works; 60% for finshing + specified works and 70% for repairs.
Vinayak K Krishna
(Accounts Executive)
(92 Points)
Replied 15 July 2014
Dear Sir, As per composition scheme, FOOD served at a restaurant can be taxable @ 4.94% Or abatement of 30% can be claimed.As per a article we got hotel food are taxable at4.94 towards service tax. Which is correct ?whether We have to pay ST @ 4.94 or ST @ 8.65( after abatement) Regards Vinayak Pls reply
RAHUL CHOWDARY
(ca ipcc)
(21 Points)
Replied 25 July 2015
CAclubindia
