Work contract tax 'wct'

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MANOJ SHARMA (Querist)
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06 March 2013 Sir, Can any bady help me about WCT deduction from subcontractor bill, as the problem is my subcontractor on construction site, billing to me with Material, which is composit contract of material & services, and asked to deducted his WCT 5% on his bill, but he prepared the bill to me with service tax on total amount 12.36% is it right that he will charge the service tax on whole of the bill and we will deduct his WCT 5%, the service tax he is charged will also applicable on his material part? the service tax should be applicabe only on the part of service is it right?

CA NIKHIL OZA

CA NIKHIL OZA (Expert)
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06 March 2013 Yes you are , service tax is to be charged only on service portion..There is an abatement for WCT of 60% on original work, 30% on maintenance and repair, and 40% on others..As such abatement should be taken if they cant maintain proper record of cast of material and service..

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