I am working with constructions co. which is Pvt. Ltd & we are in piling business under commercial & residential complex. We made RA bill to client as under.
Bill including Material & Labour Rs.100=00 Add:Vat @12.5% on 70% of Rs. 70=00 Rs. 8.75 Add:Service Tax@12.36% on 40% Rs. 4.944 Total Rs. 113.694 Please clarify above calculation is correct or not
18 December 2012
i think you are treating your service as works contract service and not construction services.
According to notification no 26/2012 dated 20/6/2012 (w.e.f. 01/07/2012), 75% abatement available to construction service(i.e. to Builders). So i believe you could have charged service tax on 25% of Bill amount i.e. on Rs 25/-
Alternatively, if you are classifying your service as "Works Contract", then also your liability to pay tax is on Service Portion Only.
Service Portion = Total Contract Value less Value of transfer of Property in Goods involved in the work contact (which is Rs. 70 here) Hence Service Portion is Rs 30 here. So liabilty to pay ST is on Rs. 30/-
I think you have taken abatement of Rs 60 based on abatement provision applicable to Works Contract. These abatement provisions are applicable only if you are not able to value service portion (which is not the case here)
CAclubindia
