Work Contract Service

Dear Sachin

As per work contrct service rules,,,,,,,,,if cost of material & labour has been seprately identified the contractor must issued a seprate bill for both . In that case contractor will charge VAT on material amount & service tax on labour amount. If material & labour is inseprable then contractor will issue a single bill of both & charge service tax @ 4% as per service tax rate on work contract service.

Hope you have no doubts...........

In both case you can take credit of VAT & service tax......At the time of payment , if contract amount is seprable then deduct TDS on service portion otherwise i.e. if not seprable dedcuct WCT on whole bill.............

Hi,

In my opinion, here Service Tax (Determination of Value) Rules, 2006 will become applicable. Attention is invited to Rule 2A which talks about valuation of works contract.

It states that Value of services = Value of Works Contract  - Value of Materials (as accepted by state Vat Authorities)