Works contract

This query is : Open

CA ABHISHEK TEKRIWAL (Querist)
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09 October 2013 A proprietorship concern is engaged in providing "Construction services other than residential complex, including commercial/industrial buildings or civil structures"
It is charging gross amount of Rs.47 Lakhs for a contract.In which they Used material of Rs.25lakhs(Rs.20 Lakhs Material +Rs.3 lakhs Excise duty +Rs.2 Lakhs Vat)and it is also taking services of a labour contractor who charged Rs.10,30,900(10,00,000+ Rs.30900 for service tax 12.36% x 25% as reverse charge is applicable and Balance 75% is also paying)now Questions are:
1.Whether TIN number is also required for material used?
2.In which manner we will issue bill ?whether we will charge both Service tax and Vat separatly?
3.is there any option of composition
(Abatment)scheme?
4.what amount of service tax would be payable in both case??Input Credit of Excise,Service Tax,Vat can be availed or not??
5.whether reverse charge will also applicable in this case of work contract as individual is providing services to company??
please help me...very urgent....tried alot to solve but could not...Thanks

KAUSTUBH M JOSHI

KAUSTUBH M JOSHI (Expert)
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11 October 2013 ASSUMING THAT THE PROVISIONS OF MVAT ACT 2002 ARE APPLICABLE FOR YOU THE ANSWERS ARE AS FOLLOWS:
1.YES TIN NO OF SUPPLIER IS MUST TO AVAIL ITC OF INPUT MATERIAL WHICH IS CROSS CHECKED THROUGH ANNEXURE J1 J2.
2. YES, YOU HAVE TO CHARGE VAT AND SERVICE TAX SEPARATELY, PROVISIONS FOR ISSUE OF INVOICE UNDER TWO METHODS IS AVAILABLE, CHARGING VAT ON MATERIAL COMPONENT AND SERVICE TAX ON SERVICE COMPONENT. YOU HAVE TO MAINTAIN RECORDS ACCORDINGLY ABOUT CONSUMPTION OF MATERIAL AND LABOUR.
3.YES COMPOSITION SCHEME IS AVAILABLE.
4. VAT @ 8% AND SERVICE TAX @ 4.944% INCLUSIVE OF E. CESS SHALL BE CHARGEABLE ON NET AMOUNT. YOU CAN AVAIL ITC OF MATERIAL PURCHASED TO THE EXTENT OF 16/25TH PART OF TAX PAID. IN RESPECT OF SER TAX YOU HAVE TO PAY 50% OF YOUR TAX LIABILITY UNDER REVERSE CHARGE AND CONTRACTEE SHALL PAY 50% OF SERVICE TAX UNDER REVERSE CHARGE. CENVAT OF EXCISE DUTY CANNOT BE AVAILABLE FOR PAYMENT OF SERVICE TAX. SAME YOU CAN CLAIM AS AN EXPENSE DEBITING P & L.
5. REVERSE CHARGE IS APPLICABLE AND ANSWERED IN 4 ABOVE.
REGARDS
KAUSTUBH JOSHI

CA ABHISHEK TEKRIWAL

CA ABHISHEK TEKRIWAL (Querist)
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11 October 2013 Mr.X is engaged in providing Civil Construction Services and charging Service Tax.SO for which out of following he can claim input credit in "BOTH OPTION" if he is opting composition scheme of(60-40) or he is calculating value of actual service portion:
a.Excise duty paid on material used
b.Excise duty paid on capital goods
c.Service Tax paid on input labour Services 25% via Invoice
d.Service Tax paid on input labour Services 75% under reverse charge??

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