Whether liable

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

26 December 2013 one of my client did works contract to a reputed company for Rs.15 lakhs.He did not charge any service tax in his bills claimed.and co also not paid any service tax to him (financial year is 2010-11)

1.let me know whether is liable to pay service tax on the above work?

2.if so ,can he pay under VCES?

CA DHEERAJ

CA DHEERAJ (Expert)
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26 December 2013 No Becuase Abatement avilabel in works contract if orignal works then 40 % of gross receipt, in your case total receipt 15 lakhs it means 15*40 % 6 laks and joint reverse charge mechanism also apply so in your case liability in only 50 % so your taxabel service amount is only 3 lakhs so you need not to registered under service tax and levi of service tax

note subject to during the year no any other taxabel service providing by you becasue thereshold limit 10 lakhs only if your crossed such amount then you have to registered and pay tax their on

so in your case you need not to go vces

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Querist : Anonymous

Querist : Anonymous (Querist)

27 December 2013 Sir,he has not supplied any material.he has charged co for location of bore points,drilling of 6.5" bore hole,erection n commissioning of submersible pumpsets,fixing chgs for PVC casing pipe chgs,transporation of drilling machine to from one point to other point .his total gross receipts for above amounts to 15 lakhs only.he has no other receipts for fin,year 201-11

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CA DHEERAJ

CA DHEERAJ (Expert)
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27 December 2013 sir in your case if you not transfer any material or you not go under composition scheme then
value of works contract service shall include (The word include indicates that the list is illustrative in nature)
i. labour charges for execution of the works;
ii. amount paid to a sub-contractor for labour and services;
iii. charges for planning, designing and architect's fees;
iv. charges for obtaining on hire or otherwise, machinery
and tools used for the execution of the works contract;
v. cost of consumables such as water, electricity, fuel used in the execution of the works contract;
vi. cost of establishment of the contractor relatable to supply of labour and services;
vii. other similar expenses relatable to supply of labour and services; and
viii. profit earned by the service provider relatable to supply of labour and services;

here joint reverse charge mechanisam also apply if your gross receipt is more then 15 lakhs but restrict to 10 laksh (50 % of 15 lakhs) if once you cross 9 lakhs receipt then you have must to registered under service tax but restrict to 10 lakh then you take benefit of notification no. 33/2012 which is less the 10 lakhs so you have no any liability to pay service tax

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Querist : Anonymous

Querist : Anonymous (Querist)

27 December 2013 thankful for your elaborative explanation and for the trouble you have taken.once again thanks.