Vat and service tax on work contract

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Tax Advocate
216 Points Posted on 22 October 2016

Dear Friends,

I have work contract For Ducting  in 18 lac from LLP Co. and i recd Exemption Certificate From Sale tax Department @ 2%

1.  in above case Service tax Appilicable or not and what Percent ?

2. and How To genereate Invoice and which head to show ?

 

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On 22 October 2016 at 12:20 Report
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CMA
9106 Points Posted on 22 October 2016
  1. Valuation in respect of consideration for works contract is governed by rule 2A of Service Tax (Determination of Value) Rules 2006
  2. Where the value of service portion can be determed (that is if you have break up goods & services), ST @ 15% (including SBC, KKC) on service portion and VAT/CST on goods at the rates applicable.
  3. But where such determination of service portion is not possible, ST is charged as follows:
  4. In case of original works: ST on 40% of gross amount charged; For maintenance & finishing works: ST @ 70% of GAC
  5. However, in case of works contract (in case you are an individual/HUF/AOP/firm) if you provide service to a body corporate (companies), then 50% of ST is payable by such service receiver and your liability is limited only to 50% of ST. But if service receiver is not a body corporate, then you are laible to pay 100% of ST.
  6. In addition to ST, VAT/CST is also applicable.
  7. For more details: https://www.kpmg.com/IN/en/IssuesAndInsights/ArticlesPublications/Documents/KPMG-Compendium-of-Service-Tax-2015-with-linking.pdf
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On 22 October 2016 at 15:00

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