03 March 2010
Company A have given contract to Company B for civil, interior and other work for Rs.90,00,000/- lakhs. Company B has given subcontract of civil work of Rs.45,00,000/- lakhs to Company C.Company C is a new Company.
1.What is the procedure for Company C to take Works Contract No under MVAT ACt and under service tax 2.Company C want to bill subcontract under composie Scheme What is rate of tax and what form it should issue to main contractor Company B 3.Whether main contractor will deduct TDS 4.Whether Company C can avail all set off on its purchases. 5.How much service tax Company C should charge to contractor Company B
05 March 2010
Ans 1: No WCT No. is required to be taken, MVAT TIN is sufficient for Company C. Ans 2:Under composition Scheme rate of tax is 5% for civil contracts. Form 406 and 408. Ans 3: No TDS deductiable by Principal contractor of Sub contractor. Ans 4: C Company can avail setoff on its purchases with retention of 4% under Composition Scheme. Ans 5: Please check i with other service tax expert.
Please note that if, principal contractor is under composition scheme, sub contractor is also required to under composition scheme.
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