Service tax under rcm

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

23 March 2015 Dear all
a partnership firm has provided the contract service to company which covers under RCM, but partnership firm having turnover is less than 10 lakhs,
should partnership firm charge 50% ST in the bill, and can partnership firm avail ST input
paid on telephone bill.

plz. reply..

S SRINIVASAN

S SRINIVASAN (Expert)
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23 March 2015 Since your firm has no taxable turnover (assuming less than Rs.10 lakhs in preceeding FY also) you need not collect 50% of service tax on works contract service rendered by your firm.
You cannot take cenvat on telephone bill during the period when you are availing turnover exemption.

Querist : Anonymous

Querist : Anonymous (Querist)

24 March 2015 Dear expert
this is contract for repairing electrical goods, hence i am not availing ST exemption limit because this is trade for other, and i am also charging 50% ST in the bill. but i have also paid the telephone bill. please
clarify am i doing correct or not. and can i avail ST input paid on telephone bill.

ples. reply..

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S SRINIVASAN

S SRINIVASAN (Expert)
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24 March 2015 Fine.If your contract includes both trading of goods and provision of services, then rule 6 of cenvat credit rules to be looked in to. But it is not clear whether you avail abatement on works contract or not. Hopefully if you avail abatement you could not claim cenvat credit.
If abatement is not claimed you need to split the cenvat credit prorata basis for taxable turnover and exempted turnover(ie trading turnover) and to avail cenvat of only that relates to taxable turnover

Querist : Anonymous

Querist : Anonymous (Querist)

24 March 2015 DEAR SIR
SUPPOSE I HAVE TAKEN CONTRACT FROM XYZ LIMITED, TO REPAIR XYZ LIMITED ELECTRICAL GOODS WHICH IS UNDER WARRANTY PERIOD, AND IN THE CONTRACT DEED IT WAS DECIDED THAT MATERIALS WILL BE PROVIDE BY CONTRACTEE. BUT THE PROBLEM IS THE CONTRACTEE IS AVAILING ST EXEMPTION LIMIT DESPITE THAT THE CONTRACTEE IS CHARGING 50% ST IN THE BILL UNDER RCM, SUPPOSE IF THE CONTRACTEE HAS ISSUED THE TWO BILL ONE RS. 100000 FOR MATERIALS(14% VAT) AND SECOUND BILL OF RS. 50000/- FOR SERVICE CHARGE, THE CONTRACTEE IS CHARGING ONLY 50% ST ON 50000/- GUIDE ME IS THIS CORRECT OR NOT.
AND CONTRACTEE HAS ALSO PAID ST ON TELEPHONE BILL CAN THEY AVAIL CENVAT FOR PAYING ST ON TELEPHONE BILL.

S SRINIVASAN

S SRINIVASAN (Expert)
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24 March 2015 Pls confirm the following
That you are the contractor and
XYZ limited is the contractee.

Who supplied material in this contract. Whether you as contractor or XYZ limited as contractee

Querist : Anonymous

Querist : Anonymous (Querist)

24 March 2015 I AM CONTRACTEE AND XYZ LIMITED IS CONTRACTOR WE HAVE TAKEN CONTRACT FROM XYZ LIMITED AND THE CONTRACTEE WILL SUPPLIED THE MATERIALS

NOTE. CONTRACTEE WHO HAS DONE WORK CONTRACT IS PARTNERSHIP FIRM
AND CONTRACTOR IS XYZ LIMITED WHOSE CONTRACT PARTNERSHIP FIRM HAS DONE.