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SERVICE TAX ON WORK CONTRACT

Meaning of Work Contract

“Work Contract” means a contract wherein transfer of property in goods involved in the execution of such contract is leviable to tax as sale of goods and such contract is for purpose of carrying out construction, erection, commissioning, installation, completion, fitting out, repair, maintenance, renovation, alteration of any movable or immovable property or for carrying out any other similar activity or a part thereof in relation to such property.-SEC 65(54) of Finance Act, 1994.

Scope of work contract

  1. work contract is joint contract in which service is provided and some material is also transfer as sale.
  2. Vat should be payable on transfer of material.So activity of sale under contract is necessary.
  3. Following activities are covered under work contract: commission, erection and installation of plant, machinery, equipment, structure ; construction of buildings; turnkey projects; maintenance services -AMC contracts; Job work contracts.
Valuation for service tax:


Method
Tax rate
Input tax credit
Calculate value as per rule 2A(i) of service tax rules, 2006
14.5%
Input services and capital goods, input consumed during work contract
Pay service tax under rule 2a(ii)
14.5%*40%/70%
Input services and capital goods, input consumed during work contract
 
 
 

Note that cenvat credit for duty paid on material on which vat is paid and property in goods is transferred is not available.

 *Budget 2015 service tax rate update
Service tax calculation as per rule 2A (i)
 
According to this method, value of work contract = 
  1. The gross amount charged for the works contract LESS
  2. The value of transfer of property involved in the execution of work contract
Gross amount Includes
  1. value of material transferred
  2. Labour charges
  3. amount paid to sub contract for labour and services
  4. charges for planning, designing,architects’fees.
  5. Charges for obtaining on hire or otherwise,machinery and tools used for execution of the work contract.
  6. Cost of consumables such as water, electricity, fuel etc.
  7. Other similar expenses related to supply of labour and services.
  8. Profit involved on above.

 

Vat or sales tax paid will not form part of value for service tax.

COMPOSITION SCHEME AS PER RULE 2A(ii) :

Scheme
Conditions
Value
A
Original works like new construction, erection, commissioning, installation
40% of total amount
B
Maintenance, repair, reconditioning, servicing of GOODS
70% of total amount
C
Other work contract (excluding A and B) including maintenance, repair, completion, finishing services of an immovable property
70% of total amount


Under composition scheme,
Service provider can pay service tax on portion of value shown above. Total amount means value of work contract including free material supplied by customer .

Composition scheme is optional to assessee but once opted for composition scheme, other exemption can not be claimed.

COMPOSITION SCHEME FOR BUILDERS

SCHEME
CONDITIONS
VALUE
A
1.       Construction contract is for residential complex includes value of land (need not be work contract)
2.       Carpet area of residential unit is less than 2000 sq.ft.
3.       The amount charged is less than 1 crore.
30% of total amount*
B
1.       Construction contract is for residential complex includes value of land (need not be work contract)
2.       Carpet area of residential unit is more  than 2000 sq.ft. or
The amount charged is more than 1 crore.
30% of total amount
C
Construction contract is for Industrial or commercial construction includes value of land (need not be work contract)
30% of total amount

*From 1/4/2016 as per budget 2016 changes.


It is up to service provider to choose scheme. He can follow composition scheme for one contract and may pay service tax on entire value of services without taking abatement.

 

 

 

117 Comments

  1. we have done works contract without material for rs. 50000/- then how service tax will be charges as per new amendment

    • By admin

      What is the nature of work contract? ( repairing, construction, maintenance ?)

      • By chauhan

        without material how can it be a works contract??

      • By admin

        Are you asking about which point?

      • I am a furniture contractor. What will be the service tax rate and abatement in case of old construction or new construction?

      • we are a service provider for repairing & servicing of Bike and vehicle. what is the effective tax scheme for service and material for repairing. What is the service tax rate ?. Vat rate ? WCT Rate ? Suppose service / labour charges is Rs.250/ and material used is Rs. 250 +100 Purchased with vat @ 14% and 5%. What will be the bill value of our customer.?

      • By amit kumar patel

        70% OF TOTAL AMOUNT
        BR AMIT KUMAR PATEL

    • is it possible work contract can i charged 5.25% as WCT and services tax charged at 70% of base value ina bil

  2. By sanjay

    The service provider is a individual and has provided works contract service on which his liability was 50%. However he has paid the 100% services tax and by mistake the receiving company (Ltd. company) has paid him the entire service tax charges. In this case whether cenvat credit is allowed on the 100% amount of tax or 50% only. Further whether 50% liability is still to be paid by the ltd. company or not?

    • By admin

      Service receiver is not liable to pay service tax again because it is double taxation and he can avail cenvat credit too. There is one case available in this favor. Please search it.

    • By Anand S.Mahadik

      Dear Madam , please reply on Mr.Mahtab Alam posted on 8th March,2016

  3. Tarannum,Nice post. I have query that as Adsense Publisher, do we need to pay Service tax? As i am blogger, placed ads on my blogs, do i need to pay service tax on earnings ? if yes, how much and how many times a year need to file Service tax return?

    • By admin

      If your adsense income is more than Rs. 10 lakhs per annum, service tax will be applicable. You are renting space to google. However, it is export or not is debatable issue to prove that the service is exempt.

      You need to get registered with service tax department when your service turnover exceeds Rs. 9 lakhs. Return is to be filed two times a year.

      Service tax should be charged to google. But issue is that is google ready to pay service tax to publisher?

  4. By Pankaj

    Hello Ms. Khatri,
    We are a Pvt. Ltd. company currently working as commercial real estate advisors. We are also adding ‘commercial office interior fit out services’ to our portfolio.
    Please advise on the following queries for a Turnkey interior job that we are taking up (includes design, architecture, complete furniture, HVAC, plumbing, civil interiors, lighting, electrical, LAN cabling, flooring, false ceiling etc.):
    1) what will be the WCT applicable under composite scheme ? Are there any input credits available ? Is it charged on entire project cost ?
    2) what will be the service tax percentage applicable ? Is it chargeable on the total contract value ?
    3) The contract value will be about INR 4 crores. When the client makes us a payment on ongoing basis as the contract is being executed, what will be the amount of TDS that they (Pvt. Ltd. company) deduct on the payments ? Will the TDS be deducted after setting aside WCT & Service Tax ?

    Please advise.

    Thank you,
    Pankaj

    • By admin

      The service tax rate is 14% without abatement and it is (14*40%) = 5.6% with abatement.

      It is required to charge on total bill value.

      Tds will be 2% on each payment.

      The tds amount should be considered on value ( Less service tax).

      Remember that you cannot avail cenvat credit while opting for abatement.

      • By amit kumar patel

        plz mention deduction of amount required

      • By sudhir

        In this case can the service receiver can avail input on service tax.

  5. By Vasu

    Dear Ms Khatri,

    I appreciate the clarity in your knowledge base. Just one clarification.
    Assuming the total contract price as 100 involving 70% as cost of supply of equipments from outside state in India and balance 30% as cost of engg design/erection/commissioning,then the taxes payable would be,
    100X 40% x14% as service tax and 70x 2% as CST. Am I right? Pl correct me if I am wrong.

    Vasu

    • By admin

      Tax payable

      CST on Rs. 70

      Service tax 14% on Rs. 30. ( you cannot use 14*40% as it is for composition scheme.)

    • By OSR INFRA PVT LTD

      Dear Ms Khatri,
      Our company is a Pvt Ltd company and sub contractor to another Public Ltd company for “Construction of ware houses for a State Govt Under taking!My question is Service Tax is payable by Main contractor as well as sub-
      contractor! In that case Main contractor will get the Input credit of the amount paid by Sub contractor! Also,if main
      contractor opted for Composition for Service Tax,then sub-contractor need not pay Service Tax? Please clarify

      D S Rao
      Hyderabad

  6. By A Shah

    In case of new construction, will the contractor have to charge VAT or CST as well as S. Tax or he can opt for composition scheme and only charge S.Tax ?

    • By admin

      He can avail composition scheme only for service tax purpose so that he is not required to segregate goods and services portions.

      He need to charge vat and cst( If applicable) on good sold for vat purpose as per vat schemes.

  7. By Danish

    Hello
    We are Pvt Ltd. company and engaged in the services of transportation. To provide our services we usually get our Vehicles repaired by the contractor. now the question is contractor provides us services of works contract but they are registered under service tax. Now what should we do?

    can we calculate our liability as follows:

    (Value x 40% x 14 % x 50%)

    • By admin

      you need to pay tax at 70% of bill at 14%. ( the abatement applied will be 30%).

      In that liability,

      50% is required to be charged in bill.

      50% is paid by you under RCM.

      Suppose service provider is not charging in bill 50% as he avails small service provider exemption.

      You need to pay remaining 50% under RCM. ( no matter about service provider’s registration under service tax.)

      • By Danish

        Thanks a Lot

  8. By T. Singh

    hello,
    I have a small query, I am a contractor, I have done a labor work contract for a builder in Mumbai,

    All the materials were supplied by the builder, I have just done the work with my labor.

    Mine is a proprietorship co. and the builder is a partnership firm.

    Generally we charge 14% S TAX to the builder and we pay the amount,
    But now the builder is insisting the I have to charge the amount to him in the bill
    but he will not pay me, instead he will only pay up the 100% amount to S.Tax dept.

    Plz help.. is this correct.. should i charge him s.tax in the bill and let him pay the entire sum?

    • By admin

      When proprietor provides service tax to partnership firm, there is no reverse charge mechanism and you are right in charging 14%.

  9. By Raj

    HI
    When i availed abatement in service tax then, i can’t CENVAT Credit taken ?

    • By admin

      Yes, when you avail abatement, cenvat credit is not available.

  10. By neeraj rakesh

    Hi, going through with the answers. It’s very clear. I have one question. I am working in a PSU Bank and looking after Premises Division. We are issuing work contract under tender system to Furnishers, Electrical n AC contractors separately. I want to know whether Bank has to pay only 50 % to contractor n 50 % of the Service tax against the bill to govt in the name of firm or individual or has to pay 100 % of the Service tax to contractor directly.

    • By admin

      When individual or firm is providing service to bank, rcm will be applicable. At that case, 50% of service tax on work contractor should be paid to contractor and 50% should be deposited to government under RCM.

  11. By Sivaraman.A.R

    We have given contract to vendor whereby the Vendor will bring JCB and level the ground (land owned by our company) for construction of a Storage shed for keeping raw-materials

    He brings JCB. That JCB is not owned by that vendor. He takes it on rent from some other person. Brings it to our factory, level the ground. He gives the JCB back to real owner. Our mechanical and civil and project department will overseas his work.

    Vendor calculates his charge like this
    Opening JCB reading time , CLosing JCB Reading time , No of hours worked * Rate per hour = Bill amount

    That vendor has taken the following ST registration
    1. Manpower recruitment agency – 00440060
    2. Works contract service.- 00440410
    3. Constuctions services in respect of commercial or industrial buildings and Civil structures.00440290

    Questions
    1. Is vendor necessary to take ST registration for Supply of Tangible goods for JCB renting.
    2. Is it necessary that JCB should be owned by him only to put it under Supply of tangible goods service.
    3. Can this JCB rental treated as part of Construction of civil structure services? (so that he need not take new registration for supply of tangible goods). If not why?
    4. If we are treating the above as part of Construction service, can we claim abatement.?(There is no abatement for Supply of tangible goods)

  12. By Sivaraman.A.R

    Everywhere I am reading that if there is transfer of property in goods involved in excecution of a contract, it will be called as Works contract.
    If there is no material element, it can be treated as construction service.

    On reading what is construction service, from the attached file , I am not able to understand which construction service is there with no material element. There is no construction service without material element

    Can you please advise me with example the types of construction services which are not work contract service.

  13. By Raghu

    we have given a contract for construction of new building worth Rs.4,51,90,000 and we are giving 50% of the amount as a mobilization advance and here I would like to know weather we have to pay service tax on mobilization advance? and what is the percentage of the service tax portion we need to pay to the government under RCM, and what will the abatement percentage? please clarify my doubt

  14. By NILESHKUMAR BANKER

    what is the effective rate of notification under works contract for Service Tax with and without abatement?

    • By admin

      The rate without abatement is 14% and you can find rate with abatement through table given in article.

  15. By Rajesh

    Contract Bill Value 120000

    Supply of material 80000
    service 40000
    ———–
    120000
    ———–
    Vat, service tax calculation, WCT method

    • By admin

      You can charge and pay service tax on 400000 at 14% or

      Adopt composition scheme and calculate service tax on 120000 at reduced rate.

  16. By Sekhar Dasgupta

    Hi Mam
    I am proprietor of a works contract firm. Total value of works is 41.00 lacs.(including material, labour, electricity, etc.) But recently I received a bill of above work as R.A. bill amounting to Rs. 15.10 lacs. I have to pay the service tax, How can I calculate the service tax which is payable by me.

    • By admin

      Calculate service tax as per applicable service tax rate of composition scheme and charge in bill. Collect the service tax from party and pay to government. For it, you need to get service tax registration number. Apply for it.

  17. By TAPASH KUMAR BISWAS

    Pls.state the composite rate of service tax for Contractors who works materials and service both.

    • By admin

      It is already given in chart. Please go through it. Or you can go through my other article – http://taxmasala.in/service-tax-rate-chart-for-fy-2015-16/

      • By yogendra

        I was engage in civil & electrical work, so can you send me excel format for billing.

      • By admin

        I am really sorry but I have not ready made format now available with me. For service tax purpose, you can read my article about service tax invoice while preparing invoice format. Read here http://taxmasala.in/service-tax-invoice/

  18. By TAPASH KUMAR BISWAS

    Pls.clarrify the Service Tax applicability of Lawyers,and Tax Consultants .

    • By madhumohan

      Any service applicable for transportation of military canteen items (VAT shown against each Canteen stores department items in the invoice) , for sale with VAT bill for military personals and ex-service man. Here we are engaging with only transportation of canteen items (under GTA) from main Defence CSD depot to Defence unit run canteens . Purchases and sales done by defence canteens only. If we are collecting service tax for transportation , that amount will add in addition to Vat in the bill while selling the products. Then, there is no welfare to the defence serving personnel & Ex-service men. The VAT + service tax = open market rate . where is the welfare?

  19. By TAPASH KUMAR BISWAS

    Dear Madam, we are a Private Limited company providing security services all over india and we are send our documents through a Franchisee of a Courier Company. Presently the courier company ( business entity is -Proprietorship) wont charge any service tax in their invoices as they told us to bear the whole service tax liability. Would you please advice what should we do ?

  20. By Ravi Teja

    We are the Construction Service Providers (Private Limited Company) provided services to L&T Limited for Metro Rail Project (Pilling Foundation Work) , the scope of Supply of Materials Such as Concrete , Cement & Steel is with L&T Limited. So, now my question is that whether the service provided by our company is exempted or not? Construction Services related to construction of Roads, Bridges, Dams & is exempted as per Mega Exemption.So, kindly advise me in regarding with this matter whether this service will come under Works Contract Service or Not and whether exempted or not?

  21. By ksabne3@gmail.com

    i apply bmc accountant job. in bmc accountant exam sylabus given one topic work contrack tax how i know which type question ask for exam. each que carry one marke i,e objective type question plz suggest?

  22. Dear Mam,

    We have give Work Contract to Individual but he is not register under Service Tax We have to Pay ST tax Fully 100% or 50% under Work contract Tax

  23. By ashwani

    2 Name of Work:- MOEI and Fans i/c Street Lights in Resdl./Non Resdl. Area . (SH: SITC of DB & Rewiring in MT/State Cell, Pdg. & laying Cable for Adm Bldg./State Cell, Painting of Pole/Feeder Pillars/Cubical Panel/Pole Box etc. in ARC and SITC of Cubical Panel in Old Substation Room Airfield).

    in this work all item is supply and fixing of accessory of electrical cable, pannel etc. this work is orginal or maintence
    please tell

  24. By VIJAY KILARI

    i have asked some questions but for that questions i m not able to see the question and answer ! where can i get it ?

  25. By shubham

    Under value of works contract the material price is taken as sale value or purchase value

  26. By VIJAY KILARI

    DEAR MADAM

    we are running ltd company ( milk dairy) and taking service from one firm for fabrication and repair work ( All material supplied by us- his work is only fitting that material with help of his owned machines like welding machine etc) , now our confusion is service provider ( firm) applying 14.5% ST to his invoice mentioned as Labhour Bill, when he was produced labhour bill, we ( Ltd company) treated this as a man power supply. but as per ST rule service receiver is liable to pay Service tax full i e 14.5% ST to Govt……. but provider is not agreed for this rule, he is telling that it is come under works contract it my liability. between us there is any agreements made for work purpose. PLEASE HELP US who is eligible to pay service Tax and if you have latest notification please produce, about works contract and man power supply clarify the rules

  27. By VIJAY KILARI

    we are running ltd company ( milk dairy) and taking service from one firm for fabrication and repair work ( All material supplied by us- his work is only fitting that material with help of his owned machines like welding machine etc) , now our confusion is service provider ( firm) applying 14.5% ST to his invoice mentioned as Labhour Bill, when he was produced labhour bill, we ( Ltd company) treated this as a man power supply. but as per ST rule service receiver is liable to pay Service tax full i e 14.5% ST to Govt……. but provider is not agreed for this rule, he is telling that it is come under works contract it my liability. between us there is any agreements made for work purpose. PLEASE HELP US who is eligible to pay service Tax and if you have latest notification please produce, about works contract and man power supply clarify the rules

  28. By lokesh goyal

    I am a civil contractor engaged in works contract business. Last year my gross turnover was 11 lakhs.The service tax officials insist that I had crossed my basic exemption limit of 10 lakhs and that I need to pay service tax from Rupee one in the current financial year.
    Kindly clarify whether the basic exemption limit of 10 lakhs is for the gross turnover of works contract or only for the service component.

  29. By Partha Pratim Bhowmick

    We booked flat at Unitech in 2010 and paid in installments. However the builder delayed to hand over the possession and now with the notice of possession they have charged additional payment @Rs. 179/- per sq.ft. They clarified that they have made payment as WCT on Civil & Electrical works – Rs. 2326473/- + Service Tax on WCT – Rs. 5094365/- + Addl charge on free materials issued on works contract – Rs. 9177011/- + Addl. Charge on finished material- Rs. 487609/-. We have already paid service tax with installment payments. Should we pay additional S.tax ? and what will be the rate of WCT at West Bengal where the construction is being made by UNITECH ?

  30. By Sanjay Waghela

    I am a Windows and shutters manufacturer and installer. What will be the Service Tax amount % as per new budget?
    We charge 8% MVAT and 5.6% Service Tax currently.

  31. By deepak

    Mam i have client his decoration serviceble business income is 2 crore how it shouldbe charged service tax

  32. Sir, we have been awarded a works contact of Rs 20,00,000/=, which also include Service Tax. While getting payment, in what amount we should pay Service Tax. Please advice us.

    • By VIJAY KILARI

      I AM GETTING RIGHT ANSWERS FROM THIS SITE

  33. Madam,

    our company is pvt ltd & we give contract for man power supply to our contractors for daily routine works.contractor is also pvt ltd company & got the registration of s.t & theirs early turn over is above to 10 lakh now my question is
    can we pay them full service charge ? pl.guide us in this matter.

    awaiting for your response pl.

  34. By ashok jangid

    if the manufacturer of excisable goods availing SSI Exemption of Rs 150 Lakhs and not paying any excise duty and along with this the manufacturer also provide JOB WORK and the receipts from which is Rs around 100 Lakhs and the activity which the manufacturer is done amounts to Manufacturer as per excise.

    in the above case manufacturer is liable to service tax or excise duty ?

  35. By Balbhadra

    Madam
    I am construct only temples with stone or marbles with carving works like ancient indian architecture monuments. It is purely religious construction and also done carving works in manner of handicrafts. Service tax is applicable or not?

  36. By ramya

    This is some small clarification, our company partnership firm, Builder company, We given to Contractor, RA Bill Received Rs. 1161672/- but contractor is not Pvt Ltd company, How to calculate Reverse Mechanism tax (service tax & TDS)

  37. By kk

    Hi,

    I have got a work contract for Software Services. Now, I am out sourcing this work to another sub contractor. There are following queries:

    1. Should I include Service Tax in the invoice to my Customer?
    2. Should Sub contractor also include Service tax in the invoice given to me?

    Lets say, I charge INR 1 Lakh to customer + Service Taxes.
    Sub contractor is invoicing me for INR 90K _ Service Tax

    In this case, if this is true, i will need to increase the billing to customer so that i can afford to pay service tax from my side as well.

    In this scenario, service tax will be paid two times for the service executed only once. Could you please let me know the details, as it is important in terms of billing. Its urgent.

    Regards,
    KK

  38. By Allaudin

    we are partnership firm, if we pay to electrical contract (including material) what is the rate of service tax? whether i have to pay @ 14.5% on 40 % amount? The contractor is a private limited company. pls advise me

  39. By PMK Engineering Services

    We are Electrical Contractors. We did a project of supply and installation of copper busbars for NPCIL under works contract tax. During every payment NPCIL used to deduct 5% WCT for 100% of the bill amount. In this case do I have to pay service tax separately again ?

  40. By Tapash Biswas

    Mam, We are a private Company providing Security Services. We hired a advertising Agency to publish our Recruitment and other requirement in Newspaper. As they are a Proprietorship concern they charges Service Tax @ 2.175% to their bill. Is it correct ? Are we need to pay the Balance amount of Service Tax under RCM. please advice.

  41. By neelam

    Raising different bills for material & labour amounts to individual transaction or will be considered as works contract since provider & receiver is the same for both the stuffs?

  42. By RAKESH MALANI

    A PVT LTD CO. IS ENGAGED IN DEVELOPMENT OF LAND /COLONIZING. WORKING WITH DIFFERENT CONTRACTORS FOR DIFFERENT WORK . CONTRACTORS ARE CHARGING SERVICE TAX ON THEIR BILLS AND 50% SERVICE TAX IS DEPOSITED BY THE COMPANY. SIMILARLY THE COMPANY IS ALSO PAYING SERVICE TAX ON PROFESSIONAL SERVICES. MY QUESTION IS CAN THE COMPANY ADJUST THE PAYABLE SERVICE TAX(50% OF CONTRACTORS BILLS) FROM INPUT CREDIT OF THIS SERVICE TAX PAID TO PROFESSIONALS

  43. By reji a george

    Taxability of defence contract works for which works order was received before 01/04/2015

  44. By Anand S.Mahadik

    Dear Madam,
    I like know that , if I have get work order with material supply. (WCT)
    Supply of Material of Rs.50 K/- & Installation charges of Rs. 20 K. Please advice . How I can raise the invoice & what will be the tax structure.
    Awaiting for your kind advice.
    Best Regards _Anand S.Mahadik

  45. By NG SRIDHAR

    We are into repair and maintenance service. Can we pay service tax on full value I.e. On 100%value and take CENVAT credit on materials used for repairing .we pay vat on materials as well
    Please advice

  46. By madhumohan

    Madam
    Any service applicable for transportation of military canteen items (VAT shown against each Canteen stores department items in the invoice) , for sale with VAT bill for military personals and ex-service man. Here we are engaging with only transportation of canteen items (under GTA) from main Defence CSD depot to Defence unit run canteens . Purchases and sales done by defence canteens only. If we are collecting service tax for transportation , that amount will add in addition to Vat in the bill while selling the products. Then, there is no welfare to the defence serving personnel & Ex-service men. The VAT + service tax = open market rate . where is the welfare?

  47. By Tapash Biswas

    Dear Madam, We are a private Company providing Security Services. We hired a advertising Agency to publish our Recruitment and other requirement in Newspaper. As they are a Proprietorship concern they charges Service Tax @ 2.175% to their bill. Is it correct ? Are we need to pay the Balance amount of Service Tax under RCM. please advice.

  48. By chetan malhotra

    Hello Ma’am
    We are into organising exhibition for govt bodies like khadi ,Handicraft ministry of textiles. They give us complete work contract like booking of ground ,electric connection, water supply, tin shops,tent work. Do we get tax benefit for providing services to govt under 25a/2012 or we come under taxation if yes then under work contract or exhibitor.

  49. By frankling

    1.VAT applicable for whom ?

    2.Clarify whether VAT Registration and VAT applicable for only labour supply for construction of single residential units, erection & construction below 33 lakhs per year turnover

    3. Clarify whether VAT Registration and VAT applicable for construction of single residential units below 33 lakhs per year turnover.

    4 For GTA if 75 % items are fully exempted category ( as per the government invoice ) as per mega exemption notification and balance 25 % items are taxable, then what is the calculation for service tax ?.Explain two / three methods of calculation as orders in force.

    5.For GTA after abatement whole taxable amount is Rs 10000/- per month , can we reduce the taxable amount by subtracting the paid service taxes shown in the bills and expenses of the office function, stationery, rent ,electricity and proprietor expenses .What are the other ways / expenses for reducing the service tax amount?.

    6. For GTA proprietor firms what is the turnover limit per year for audit, VAT, Service tax and income tax.

    7.For GTA proprietor firms what is the turnover limit per year for self-assessment , submission of returns, VAT, Service tax and income tax

    Any service Tax applicable for transportation of military canteen items (VAT shown against each Canteen stores department items in the invoice) , for sale with VAT bill for military personals and ex-service man. Here we are engaging with only transportation of canteen items (under GTA) from main Defence CSD depot to Defence unit run canteens . Purchases and sales done by defence canteens only. If we are collecting service tax for transportation , that amount will add in addition to Vat in the bill while selling the products. Then, there is no welfare to the defence serving personnel & Ex-service men. The VAT + service tax = open market rate . where is the welfare?

  50. By DEEPAK

    we are running ltd company ( milk dairy) and taking service from one firm for fabrication and repair work ( All material supplied by us- his work is only fitting that material with help of his owned machines like welding machine etc) , now our confusion is service provider ( firm) applying 14.5% ST to his invoice mentioned as Labhour Bill, when he was produced labhour bill, we ( Ltd company) treated this as a man power supply. but as per ST rule service receiver is liable to pay Service tax full i e 14.5% ST to Govt……. but provider is not agreed for this rule, he is telling that it is come under works contract it my liability. between us there is any agreements made for work purpose. PLEASE HELP US who is eligible to pay service Tax and if you have latest notification please produce, about works contract and man power supply clarify the rules

  51. By Nikhil

    Why is interior services covered under original works contract and taxed at 40%, when there is separate point of other works contract including completion and finishing services? Shouldn’t interior services be covered under this?

  52. By Mithun Jain

    Do i need to apply for service tax registration if composite scheme to be made applicable. We already have service tax registration and now is it mandatory to apply to department for composite scheme

  53. By M Srinivasa Rao

    Madam,Recently I have purchased one flat from builder worth ₹3030000.what is the service tax I have to pay. The builder is telling Total cost I.e 30.30-40%-1200000.is it correct?

  54. By Govind

    Suppose i charge 100 for a part of work plus service tax of 14.5 % to a builder for work contract. Out of my 100 i pay 80 plus service tax to the sub contractor. Obviously i will get the cenvat credit for that 80 plus service tax which i paid to the sub contractor.

    The than pay 15 to buy various contruction materials for the work contract.

    The remaining 5 remains as a profit.

    I want to know how will i calculate the service tax for such kind of a business.

  55. By Mr. Amol Sawant

    Hello Madam,
    I am working as a labour work contractor for a construction company. what % should I charge service tax on bill amount.

  56. By S.Madhavan

    Dear Madam, I have booked a 677 sq.ft flat with reputed pan india builder . they are charging 5.8 % service tax on total value including land value. I have pointed out this mistake and refused to pay service tax on land value. Am I correct ? .

  57. By Rajesh

    latest work contract service tax slap table

    • By admin

      It is updated after budget.

  58. By pravin malvi

    i have one question i am reg under works contract in Hyderabad.is this correct to calculate vat liability.Basic Amount+Service Tax 14.%=Total*Abatement %=Vat Liability. if this is not corrector than tell me the right one.i need clarification with Hyderabad vat law

  59. By DC BABU

    In EPC Contract while receiving advance what portion shall be susceptible to service tax since entire advance of say 10% on the whole contract ; does it mean service tax has to be on the entire 10 % of the advance or can we bifurcate into 60 % and 40 % and pay only on the 40 % ? where in the Act or the Rules has this been clarified without ambiguity since while receiving advance there can not be any document to prove that it includes both materials and service portion ?

  60. By Anup

    Dear Madam,
    I am working for Defence as a registered contractor. Just got a WORK contract i.e. for Manpower service providing to defence Power house, Pump House as operator . This contract is for 11 months and our employed person doing this job of outsourcing and we charge for this job e.g. 500/- per 8 hrs. shift . Please clarify our work is under service tax.and if yes then what amount will pay as service tax on this 500/- .

  61. By Amit

    What will be the amount of service tax and vat on bill of Rs.500/- (eg.) using composite scheme ?

  62. By Ajita

    50% of ST is payable by the awarder i.e. 5.8 of 14.50 under abetment category. let me know how i calculate the 2.9 in the cost if WCT is also to be deducted from my contract value if contract value is of 85 lac

  63. By iliyasmohd bihari

    sir i am a work contractor my servie tax rate 40% taxbal my notfication nober when and what Notification number and abatement nober with sl no

  64. By sateesh

    hello Madam,
    My Question is the invoice price is 25,00,000 in which vat amount will 4% on bill value (we are in Composite Scheme) and what will be the Service tax amount ? can you just help me out

  65. Dear mam, our client is government work contractor. whether they can opt for composition scheme? If yes then plz tell me notification no.

    Thanks in advance.

  66. By Radheshyam Kumar Sah

    one contractor’s total bill was of rs.1000000 and out of which contractee bought raw material for Rs500000. please tell me the taxation procedure. should it charge on the whole bill amount or only on 1000000-500000

  67. By kiran

    hello Madam, I am a civil works contractor and I have taken Service Tax Registration under works contract. I have done work with a private limited company. For Example I done work of Rs. 1 crore and the company deducted Rs.20 lakhs steel and cement. Now my question is what is the Taxable amount for Service tax.

  68. By yogendra jain

    Hii Mam,
    Please resolve 1 issue
    my client provide the service of road construction to school along with material
    what will be the rate of service tax??

  69. Our company have company registration and also have service tax number. My Company has given a contract for Aluminium partition work with materials and Total value of works is Rs 154609.00 (including material, labour, freight etc.). I received a bill of above work as above amount. I have to pay the service tax, How can I calculate the service tax which is payable by me.

  70. By SATRUGHAN RAJBHAR

    I am a Govt Employee working as an Accountant, I have to pass contractor’s bill i.r.t Repairing/ Construction of godowns. I just want to know about if invoice is submitted by contractor with bifurcation of material supplied with service provide, then RCM will be applicable/ what percentage of service tax will be leviable on what portion? If 50:50 ratio will be applicable or not?

  71. By Mahesh

    Hi Mam,
    We are working for Income Tax Department , furnishing of Interiors, under works contact. Are we required to pay service tax?

  72. By Kalyan

    Madam,we are building a building,we have given the contract for structure.steel and cement have been bought by us and given to contractor.now in bill he has charged 5.8% for service tax for entire steel and labour,in labour Iam paying 65 % account money,but he has put service tax for total labour bill and for material.is this right taxation to pay for the goods I purchased,and is it the service tax only for labour y is it for material also

  73. By MEENANSHU

    HOW MUCH IS THE SERVICE TAX ON WORK CONTRACT IN FY 15-16 LIKE IT WAS 4.944%EARLIER

  74. By Ashok

    I am an individual businessman doing LED background lights for signage boards, Hoardings etc.,
    What will be the service tax rate. And I have registered under karnataka Vat Act also charging 14.5% VAT tax in bill.

  75. We are a Pvt Ltd and acting as sub contractor to the Main Contractor. We are Structural Fabricators where Iron and Steel like Girders, Angles and even Heavy Machinery like Cranes etc are provided by the Main Contractor at site. We buy consumables like Welding Electrodes, MIG Wires, Gas etc used for cutting and welding purposes and use our labour for these activities. My Questions are :

    1. Will this activity qualify as a works contract
    2. If Yes, then I qualify for a 60% abatement
    3. One typical situation is that we work with two contractors. One pays us 100% service tax without claiming abatement and the other pays us after claiming abatement. How to handles this in Half yearly Return

  76. By Rita

    I have just renovated and extended my old home in Delhi. Do I have to pay service tax on all (1) with material and (2) only labor contracts? Second, if these contracts specifically fix rates inclusive of taxes am I liable to pay service tax or is it the responsibility of service providers, i.e., in this case contractors?

    The house is a single residential unit in a cooperative society and used by one family since its purchase 50 years ago.

    Thank you

  77. By sudheer

    Madam,
    Our is manufacturing company regularly we are giving work contracts , material we are supplying to service providers they are doing fabrication and errection works (service providers status : company & individual both) . After completion of work they are submitting bill only for service portion on tonnage basis . Now company status persons are charging service tax 14.5 % on bill value . Individuals status person charging 7.25 % on bill value . My question is what is rate of service tax % for company status and individuals. These type of service will come under which service : work contract

  78. By devaraj

    we are running a hotel and renovating the rooms. For the renovation, we have engaged a contractor who executes the work with materials. Now that he will raise bills inclusive of service tax on 40% of the total value and VAT on 60 % value. Are we entitled to avail credit for the service tax payable by the contractor where he is not showing the service tax separately? In case he is asked to charge service tax @ 70% on the service portion and show in the invoice separately, can we avail service tax credit and use it for output service tax payable on room charges collected by us?

  79. By Ganesh

    Comprehensive AMC contract for repair & maintenance of air conditioners or UPS system including manpower deployment with spares / consumables , what will be the present rate of service tax and also confirm rate of VAT tax etc. under which rule for year 2016-17.

  80. By Mahendra Chhajer

    Our Company has given work order to a Firm for AC installation. Firm issued separate bill for material & labour work charging full service tax i.e 14.5/5 on labour amount.

    Please clarify that if service provider determining service portion in work order as per Rule 2A(i) of Determination of Value Rules 2006, is there any liability on service recipient ( body corporate ) i.e. 50% under RCM or full ST is payable by service provider.

    Thanks,

  81. By Bhavesh Vashi

    we comes in Other work contract (excluding A and B) including maintenance, repair, completion, finishing services of an immovable property.

    We are a vendor and from a company which we have taken works contract is demanding for salary register. in a format that 70% of total invoice and 60 % of it must be labor charge means my invoice is of 1300000 then 70% is 910000 and labor charges should be 60% of 910000 that is 546000 but mine labor cost is not that much and they are demanding for that only they have stopped my payment from last 4 months for this reason so is there any rule that salary register should be in this format? can any one help me out ?

  82. i am a railway contractor, and have started a civil engineer work in assam on date 5/01/2016.
    the nature of work is to construct a officer rest house for railway dept. there was a tender for the mentioned work from the railway dept and i have won the tender.
    my firm is registered with service tax dept.
    am i applicable to pay service tax as i am doing this work for railway dept. if yes!! how much??

  83. By SANDEEP CHAUDHARY

    I have pvt ltd company & got a tender from cpwd civil construction work. my question is service tax charge 40% of work done and the same reimburse by cpwd. According there is sub contractor charge service tax than we can taken input or not . Please explain briefly

  84. By K JAYANTH KUMAR

    Dear Madam, I have to start Paint Work at one of the MNC’s under works contract. The Building is a existing building & we need to paint the terrace of approximate area 2500 sft ,value Rs.50,000/-.
    Can U pl help me with what the Service Tax liability would be for this works Contract work? I will be filing VAT @ 5% under works contract.

    • By admin

      If the total value of consideration is Rs. 50000, you are not liable to charge service tax in bill. ( If total turnover of your work in PY 2015-16 is less than Rs. 10 Lakhs.)However, the company is liable to pay service tax under reverse charge itself. The company will take care of it. You do not need to charge in bill.

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