Works contract service

The exemption limit is  Rs. 10 lacs of the taxable services billed and not 25 lacs.

Regards,

CA C P Viswanathan

  Mr Rohit,

  When a contract is for only services,not including any material,then the whole value of contractis becomes liable for ST @ 4.94%,not just 40% of it. The 40% ratio is applicable when works contract includes both material and labour in its execution......mjk

there is no proviision of Small Scale service provider in case of works contract... In your case Rs.25,00,000 is the taxable amount and service tax payable shall be 4.94% X 25,00,000 i.e. Rs.1,23,500

there is no proviision of Small Scale service provider in case of works contract... In your case Rs.25,00,000 is the taxable amount and service tax payable shall be 4.94% X 25,00,000 i.e. Rs.1,23,500

Under service tax act, once you cross taxable limit of Rs 10 lacs , service tax is leviable on entire amount 

In example sited by you ,the contract value is Rs 25 lacs and value of material and services could not be

bifurcated 

Then 40% of Rs 25 lacs shall be service portion shall be taxable @ 12.36%.

now answering very specific to your query ,assuming you have not provided any service besides this then the value of service provided arrived at Rs 10 lacs (40% of Rs 25 lacs) .

Now since you have not cross rs 10 lacs limit , you have two option either to avail benefits of thress hold limit or to pay service tax and collect from customer