Service tax for work contractors

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

11 July 2015 Very urgent
Dear Experts

am working in an work contracting company.
previous month we raised a service bill to our customer where service tax is raised on full 14% but as per service tax rule a service provider has to raise only 50% of service tax.but our customer deduct those 50% of service tax amount. my question is we still not paid our service tax for 1st quarter so if we have to pay the full amount or 50% of service tax amount .
This is very urgent for me.

Thanks in advance

Sandeep Jadhav

Sandeep Jadhav (Expert)
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11 July 2015 Dear

If your are contractig company then you have to Charged service@7% on Service value or @14% on 50% service value.

Under Reverse Charge Mechanisam 50% service tax charged by service provider and remaining 50% by service receiver..

if you are not paid the tax to the government then revised the invoice and send it to client after making necessary changes in this

e.g. 100 Value
Service Tax @14% on 50% Service value is Rs. 7 then total Bill amount is Rs. 107.00

i hope its clear your doubts.

Regards
sandeep Jadhav

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Querist : Anonymous

Querist : Anonymous (Querist)

11 July 2015 Thanks for your information sir.

But the problem is the client din't accept our revised invoice.so what we do now?

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Querist : Anonymous

Querist : Anonymous (Querist)

11 July 2015 Thanks for your information sir.

But the problem is the client din't accept our revised invoice.so what we do now?

Querist : Anonymous

Querist : Anonymous (Querist)

11 July 2015 Thanks for your information sir.

But the problem is the client din't accept our revised invoice.so what we do now?

Sandeep Jadhav

Sandeep Jadhav (Expert)
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11 July 2015 THEN MAKE REVERSE CALCULATION ON WHAT AMOUNT YOU GET FROM RESPECTIVE CLIENT ..

IF. YOU GET RS200 FROM CLIENT THEN MAKE REVERSE CALCULATION IN RELATED TO THIS AND CREATE THE YOUR SERVICE TAX LIABILITY.

RS200*100/107= 186.92 IS BASIC VALUE
THEN SERVICE TAX @7% = 13.08
THEN TOTAL VALUE INCLUDING TAX IS RS. 200

Querist : Anonymous

Querist : Anonymous (Querist)

11 July 2015 sorry to say this sir i really don't understand this.i want to know if we pay the full 14% as on original bill or only 7% because they deduct 7% from our bill.

Querist : Anonymous

Querist : Anonymous (Querist)

11 July 2015 sorry to say this sir i really don't understand this.i want to know if we pay the full 14% as on original bill or only 7% because they deduct 7% from our bill.

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Sandeep Jadhav

Sandeep Jadhav (Expert)
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11 July 2015 DEAR... SERVICE RECEIVER HAS TO PAY TAX ON 50% SERVICE AND REMAINING 50 % WILL BE PAID BY SERVICE PROVIDER...

IF YOUR SERVICE VALUE IS 100
THEN YOU HAVE TO DEDUCT 14% SERVICE TAX ON 50% VALUE OF SERVICES MEANS 50 * 14% = RS 7

THEN YOUR CALCULATION AS PER FOLLOW

SERVICE RS. 100
SERVICE TAX @14% (ON RS. 50) RS 7

TOTAL RS. 107