26 December 2013
I have a taken a contract for a local company in Andhra Pradesh, for Interior & Finishing works. The Contract amount is Rs.10 Lakhs (including material and labour cost). I want to know what will be the VAT and Service Tax Liability and how is it calculated. It is not possible to separate the Material and Labour Cost. 1.How VAT & Service Tax is Calculated? 2.Whether Input Tax Credit allowed on materials purchased? 3.Whether Input of Service Tax is allowed?
The options under ST are: 1. Pay 4.12% on gross value under composition.
Credit of CED on capital goods + Service tax credit on eligible input services wouldbe available.
2. Pay ST on 33% and VAT as per local VAT law. No credit available.
3. Pay VAT on actual materials transferred and pat ST on balance: if VAT paid on 65% then pay ST on 35% under Not. 12/2003. Credit on Capital Goods / Services available.
CAclubindia
