17 December 2008
Hello, We are a Construction Company building townships.
There is an agreement between two of our group of company where Company A is under obligation to estblish the Infrastructure.
My query is that How Company A should raise bills for Roads, Water-supply networks, electric network etc.???
As both Material & Labour are used, how we should calculate VAT on each bill?
Do we require to show VAT on each bill separately? or we can give cum-vat bill?
At the time of filing of return, how we should show?
One more point is that we have applied for VAT Tin and we have started purchasing material with TAX INVOICE. Hope it wont take away our right for input credit.
17 December 2008
VAT is applicable on material not on the labour charges. Service tax is applicable on labour charges. You need to show VAT on all bills, however you can also isse bills inclusive of VAT.
The Company B does nt have service tax number. This company hires labours on contract and those contractors dont charge service tax. By the way,Company B deducts tax on the contractor payment.
Plz let us know how VAT & Service tax on ths should be calculated?
CAclubindia
