Service tax on works contract
This query is : Resolved
Siva Chockalingam.Rm
(Querist)
14 August 2012
Sir,
Please clarify Service Tax on Works Contract from 01/07/2012 on account of Notification No.35/2012 dated 20/06/2012 rescinded Composition Scheme.
1.At what rate we have to pay Service Tax on Woks Contract now?
2.Is there any abatement available?
3.Service Receiver is liable under reverse charge?
Siva
Please clarify Service Tax on Works Contract from 01/07/2012 on account of Notification No.35/2012 dated 20/06/2012 rescinded Composition Scheme.
1.At what rate we have to pay Service Tax on Woks Contract now?
2.Is there any abatement available?
3.Service Receiver is liable under reverse charge?
Siva
RENGARAJ R.K
(Expert)
14 August 2012
Dear Rm.Siva Chockalingam,
There is a valuation rule. Pleas see the Rule 2A of the service tax determination value rules, 2006. It is linked with local TN-VAT Act for arriving the material cost.
Then go to reverse charge notn:30/2012.
Ans: 1) 12.36% on 40% of the contract value for new construction
2) abatement is 60% for original works, 30% for maintenance and 40% for other works contract.
3) Service provider has to pay 50% tax and service receiver 50% under reverse charge, after availing the abatement.
Kindly go thro the relevant notn for valuation, and liability of the person.
There is a valuation rule. Pleas see the Rule 2A of the service tax determination value rules, 2006. It is linked with local TN-VAT Act for arriving the material cost.
Then go to reverse charge notn:30/2012.
Ans: 1) 12.36% on 40% of the contract value for new construction
2) abatement is 60% for original works, 30% for maintenance and 40% for other works contract.
3) Service provider has to pay 50% tax and service receiver 50% under reverse charge, after availing the abatement.
Kindly go thro the relevant notn for valuation, and liability of the person.
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