16 May 2009
There are three methods for accounting for works contract: 1.Actual basis - VAT is to be charged on material and service tax on labour charges on actual consumption basis + appropriate apportionment of profit between the two.
2.On adhoc basis. VAT - On 70% of contract amount Service Tax- On 30% of contract amount
3.Composition Scheme
VAT-@5% of contract price. Service tax @ 4.12 of contract price.
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