Works contract

This query is : Resolved

P.A. FRANCIS (Querist)
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24 September 2013 Who will pay Service tax on works contract, provider or receiver ? How many percentage has to pay receiver?, Can we take Cenvat Credit?

RENGARAJ R.K

RENGARAJ R.K (Expert)
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24 September 2013 It has to be paid by both provider and receiver if provider is other than company.

If works contract is meant for company, 50% will be (after abatement) payable by provider and other 50% will be by receiver.

Service tax on works contract is a lengthy subject. Hence, go to valuation rule 2A and you have to apply the % of abatement and you have to see the reverse charge mechanism.

It is based on your VAT valuation, if vat valuation is not ascertainable, go to rule 2A.