The Person executing works contract can opt for composition scheme and pay 4% Service Tax on the Gross Amount charged for the services. My question is whether the person executing the works contract can collect the same from his client or he has to the pay same from his pocket without collecting it from his client. Please give the clear solution for this and it is very very urgent for me.
He can collect it from the client.
Thank you Mr. Rajesh Kumar Sir for your replay and I want to know one thing i.e. in case of composition in state VAT the composition shall not be collected from the client and shall be paid by the dealer him self because The VAT Act of Karnataka restricts the collection of Composition tax from the client. Is there is no such a restriction in case of Service Tax for collection composition tax from the client.
I dont know about VAT Act of karnataka, but if such act is there- it is idiotic. VAT is an indirect tax, and the trader has a right to collect it from the consumer. If he is paying full rate, he will collect full rate; if he is availing some exemption and paying at a lesser rate, he should be allowed the collect at lesser rate.
In service tax there is no such problem. You ca collect from your consumer whatever amount of service tax you are paying.
YOGESH KAPOOR AND ASSOCIATES
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Sri Aurobindo Gnostic Centre of Education
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