06 June 2012
In a contract of work, State VAT allows the dealers to pay VAT on certain % basis say 20% of total value of contract at 4% VAT and 50% of total value of contract at 12.5% vat where dealers do not maintain proper books of accounts. The dealers used to bill accordingly and pay vat. If so, service tax should attract on rest percentage i.e on 30% of value of contract at applicable rate as because vat and service tax are mutually exclusive. Is the present frame of service tax provision will allow dealers to pay service tax in the above manner? And from this year, 50% of such service tax again vested on receivers. The whole story need clarity. Experts can you please enlighten on this part.
07 June 2012
namaskar.Pl.refer Notification No.11/2012-S.T.dated 17.03.2012(to be effective from 01/07/2012 vide notification no.19/2012 S.T.dated 05.06.2012.).By this notification new rules are framed.Rule 2A of the S.T.valuation Rules is substituted by a new rule 2A.value adopted for STATE VAT shall be taken as value for transfer of property in goods involved in the execution of W.C. shall be excluded for s.t.for more details pl.read the Above referred notification.C.A.sagar mal pareek,09824346469
07 June 2012
for the response to above query pl.read as under: Vide Notification No.24/2012 S.T dated 06/06/2012,the earlier Notification no.11/2012 of 17/03/2012 has been superceded.hence requested to pl.refer Notification No.24/2012 s.T of 06.06.2012 for the response.tks n rgds.CA.sagar mal pareek,09824346469
Notification 24/2012 included in case of works contract entered into for maintenance or repair or reconditioning or restoration or servicing of any goods, service tax shall be payable on seventy percent. of the total amount charged for the works contract; thus repair and maintenance nature of contract where supply and labour and service involved came in the works contract ambit.
Although the definition of works contract has not been changed it still related to structure and building or plant & machinery in relation to such structure.
Secondly, in my example the value determined for contractual transfer of goods is not the actual value of materials but a specified value in the VAt Rule, whereas notification 24/2012 used the word actual value that's another area of doubt. If this value considered as actual value for service tax purposes will it be fare determination of value or for this purpose, value specified in clause A or B or C will be taken?
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