Works contract query (service tax)

Abatement scheme is not available if you are registered under works contract. Abatement is available if you are regisrsterd under commercial constrcution/residential complex/erection installation. Rate is 67% and if land value is included in consideration, then 75%.

So should I advice them to go for the composition scheme??

Yes composition is advisable. Else you can exclude value of goods and pay 10.3% on labor element.

Ok. I will do the same. 

Thank you.

Sir one last query. Assuming that the client opts for paying tax @ 10.3% , can he avail cenvat credit on telephone bills?

And can he avail Credit Of Inputs of work from sub contractor? I think we are allowed credit of input services and capital goods but not inputs.

 

Thanks in advance.

If ur client opt to bill seprately for material and labour and ready to pay 10.3%..he will get all the the credits of service tax paid by him either on telephone or subcontractor, But if he opts to go with composition 4.12%, he wont be able to get cenvat credit on above. only service rendered to him under construction of complex/residential, erection and installation will be eligible for cenvat. 1.if your S/c makes a bill charging 10.3%, then your contractor will get only 40% of above 2.If contractor bills with 4.12% then whole amount will be eligible. I hope this will help u lot and best in my opininon and knowledge but also take opinion by rest of experts on above