Works contract

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Dear Sir,

we are doing construction business under works contract for a LTD concern. so which category we are coming under this operation whether service provider or service receiver also please clarify we are applicable for abatement as well as RCM.

Replies (1)

Dear Raja

 

As you are providing services to Ltd. company than you are Service Providers. There is 60% abetment in for construction services under work contract.

You will have to pay 50% service tax on Taxable bill amount. (i.e 40% of bill amount)

 

Example:- Bills Raised during the year Rs. 10000.00

               Abatment            60%                  6000.00

               Taxable Amount                          4000.00

               Service Tax                                  247.20 

               (4000*50%*12.36%)

 

Balance 50% service tax shall be paid by service receiver (i.e. Ltd).

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