My name is Rajkumar. I have completed my MBA with finance specialtion.
I would like know the "what is the distungish between the service tax collecting 4.12% and 12.36% on 33% of invoice value.How they are measure to collect this service tax and what basis?"
05 January 2009
In some type of services, department has provided abatements on %s basis like works contract where material and services are INCLUSIVE there is an abatement of 2/3 (means 66.666666666%)
Some service providers are calculating service tax by direct method that is service tax rate multiplied by taxability percentage which in above case is 1/3
05 January 2009
Suppose there is a works contract of 100/-. Now, in service tax there is abatement of 67%(adhoc of material value). So labour value =(100-67)= 33 * 12.36% = 4.12 or alternatively u can charge 4.12 on 100 = 4.12.
CAclubindia
