Service tax on business auxiliary service
This query is : Resolved
12 January 2013
The company(Gurgaon based) is engaged in business auxiliary services(it does the plating work on the item provided by the client and also uses self purchased raw material on that item.
As this involves both Service Tax and Vat.
So my query is on what amount the company has to charge service Tax ?
As this involves both Service Tax and Vat.
So my query is on what amount the company has to charge service Tax ?
12 January 2013
The credit on the raw material can be taken and ST to be paid on the gross amount.
12 January 2013
dear sir,
can you explain it with example.
can you explain it with example.
12 January 2013
If you are undertaking certain plating ro painting work during the course of manufacture of parts of cycles or sewing machines pl check wheter you are eligible for the exemption under Srl No. 30(d) of the notification no. 25/2012 dt. 20.6.2012.
It would qualify for exemption under srl.no30(c) of the above notification, if the final product is liable to excise on which appropriate duty is payable by the principal manufacturer.
In all other cases it would qualify as a works contract as in the course of electro plating the material is also getting transferred.
(i) If the value of goods transferred in the works contract is determinable Service tax laibility can be dishcarged @ 12.36% on the value of services only (excluding material value). In this case the value for trasfer of property on gods shall be determined as per the valuation is adopted for the purpose of payment of VAT.
(ii) If the value of goods transferred in the works contract is not determinable as above, service tax has to be paid 12.36% on the @ 70% of the value of the contract.
If the service provider is a corporate, then he is liable to pay the whole service tax liability. If the service provider is a non corporae and the service receiver is a corporate then only 50% of the above value determined under (i) or (ii) as the case may be is to be paid by the service provider and balance 50% have to be paid by the service receiver under reverse charge.
It would qualify for exemption under srl.no30(c) of the above notification, if the final product is liable to excise on which appropriate duty is payable by the principal manufacturer.
In all other cases it would qualify as a works contract as in the course of electro plating the material is also getting transferred.
(i) If the value of goods transferred in the works contract is determinable Service tax laibility can be dishcarged @ 12.36% on the value of services only (excluding material value). In this case the value for trasfer of property on gods shall be determined as per the valuation is adopted for the purpose of payment of VAT.
(ii) If the value of goods transferred in the works contract is not determinable as above, service tax has to be paid 12.36% on the @ 70% of the value of the contract.
If the service provider is a corporate, then he is liable to pay the whole service tax liability. If the service provider is a non corporae and the service receiver is a corporate then only 50% of the above value determined under (i) or (ii) as the case may be is to be paid by the service provider and balance 50% have to be paid by the service receiver under reverse charge.
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14 January 2013
Thanks a lot srinivasan Sir
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