Service tax

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Ravindra Kumar (Querist)
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13 October 2015 Dear Sir,

I am working in a NGO. Recently we have signed a agreement with CSR regarding construction of a new pond in their project area. The details of budget is as under-

1) Purchase of cement, sand etc. Rs. 15,00,000
2) Labour Rs. 5,00,000.00
3) Our services charges (Admn.) Rs. 2,00,000.00

Total project cost is Rs. 22,00,000.00

My question is whether we have to charges the services tax @14% on total project cost i.e. 22,00,000.00 or on our Admn. charges i.e. Rs. 2,00,000.00

Here we have to purchase and arrange all the material etc.

Kindly suggest

Regards

Ravi
9406501655

CA Mohit Bansal

CA Mohit Bansal (Expert)
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13 October 2015 Dear Sir,

In your case, service falls under "declared service" and it is "Works Contract". Hence service tax is payable on the 40% of the total value of contract i.e., 40%*22L*14%= Rs.123200/-