Service tax

This query is : Resolved

ADHITYA SRI GUPTA KOTHAMASU (Querist)
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16 July 2016 One of my friend took a contract in which he has to purchase goods and provide some labour services also. Now on what amount he has to charge service tax.
It is like e.g, Contract amount id for 1lac
In that material component is 60lac
Labour is 20 lac
and the profit margin is 20 lac
Kindly suggest me based on the above example on what amount we have to charge service tax.
Thanq

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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16 July 2016 Service tax payable on 40 lac (Labour 20 lac + profit 20 lac). Value of goods purchased is excluded from service tax.

CA AJAY KUMAR AGRAWAL

CA AJAY KUMAR AGRAWAL (Expert)
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16 July 2016 Dear Aditya, it would have been better if you could provide more information. Why we should take it as compulsory Service Tax case. Cost of material seems to be a large portion of the transaction.

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