SALE IN WORKS CONTRACT

This query is : Resolved

RAJ VERMA (Querist)
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25 September 2010 I AM WORKING IN FIRM WHICH DO THE BUSINESS OF MECHANICAL CONTRUCTION WORK IN REFINERY. I WANT TO KNOW THAT WHAT WILL BE THE SALE AMOUNT IN TRADING ACCOUNT BASIC VALUE BEFORE SERVICE TAX OR THE AMOUNT (GROSS AMOUNT INCLUDING SERVICE TAX) ON WHICH CONTRACTEE DEDUCT THE TDS.PLEASE CLARIFY THE MATTER IN RELATION TO CONTRACT.

CA Arvind Singh Chawla

CA Arvind Singh Chawla (Expert)
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27 September 2010 It appears that the firm is undertaking a comopisite contract as TDS is deducted on total amount( incl your value + Serv. tax).

Since you are collecting tax and will eventually deposit it, service tax amount will not be reflected in your sales- as it will be nullified at a point of time. The position does not change even if it is assumed that payment is made by CENVAT.

Lastly, service tax is not part of your income/ sales and hence should not be shown in receipts

Hope this solves your query