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Vinky (Querist)
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17 January 2011 Dear Experts,

As i am running business of Contractor registered with Indian Oil Corp. Ltd (public sector/govt. undertaking) which includes activities like const. / repair of roads, ecectrical pannels/cables, tank installation, Fabrication, building etc (all the work at petrol pumps). I am paying VAT 4% which is deducted at source & TDS. All the rates of IOCL is inclusive of all taxes.

Plz let me know is the service tax applicable on us & if yes how much & from which date.

plz let out a easy way as we have very little profits in our business.
i think it was applicable from 2006 or 2007. I read somewhere if you are working for govt you can pay 2% for civil contractors. else i also read they can all opt in for WC and pay 2.06 % after deducting the amount on which VAT is paid. Further they are admissible for the credits on capital goods as well as input servcies.

Also we are not getting any benifit on input tax, as 4% vat is applicable on us, 4% isdeducted at source & what ever we pay extra at purchasing should be refunded but the sales tax department doesn't pay refund.

plz let me way out with minimum tax

Hitender Gaur

Hitender Gaur (Expert)
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18 January 2011 IOCL is deducting 4% of WCT TDS from your each R.A. Bill (on 100% of your TurnOver). It is your choive you go for Composition Scheme or General System of VAT. in General System of Vat Computation of Tax will be as: Total Turnover - (Less- 25% Labour Component or actual labour paid + upto 15% of Hire Charges or actual + upto 5% or actual Electricity or Water Charges + upto 3% or actual POL charges) = Taxable Turnover
Tax Liability = 12.5% of 70% of Taxable Turnover + 4% (in delhi 5%) of 30% of Taxable Turnover

Tax payable = Tax Libility - [Input VAT (VAT paid in purchase invoice) + TDS(WCT) deducted from IOCL ]

if Tax payable is nagative then carryforward to next tax period otherwise pay the tax.

In Service Tax you have to pay 10.3% of 33% of your Total Turnover as Service Tax, Other Wise go for WCT Compositon Secheme of Service Tax which is w.e.f. 1.7.2007 under this you have to pay 2.06% of your turnover as Service Tax But you can get the credit of Serive Tax you paid in bills + Excise paid in your purchase bills (only consumable not capital goods)

Vinky

Vinky (Querist)
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18 January 2011 Sir, some one told me that IOCL is semi govt, so we will have to pay 4 % ?

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Hitender Gaur

Hitender Gaur (Expert)
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19 January 2011 Work Contract TDS Rate is 4% not the rate of tax libility.(because it is assumed if contractor does not go for registration in VAT/WCT, govt. libility under composition scheme is fullfilled by the principle employer after paying lumpsump rate of WCT i.e. 4%, for and on behalf of Contractor)