CA SANDESH MAHIPAL (Practicing in GST and MSME ) (1985 Points)
15 October 2014I am engaged in business of Civil Construction. I have just taken a sub -contract of 12 Crore for construction "Canals".
Please tell me what would be my liability under VAT, Service tax and Income tax or any other, if any.
Please also tell me about PF and ESI for the same purposes.
Thanks
Sumit Grover
(Chartered Accountant )
(3652 Points)
Replied 15 October 2014
Service Tax:
If you are providing construction service to govt.or local authority, then the main service is exempt by virtue of entry no.12(d) of N/N 25/2012-ST. Accordingly, sub-contractor services of works contractor are also exempt vide entry no. 29(h) of N/N 25/2012-ST.
In case services are provided to non-govt. entities, the same shall fall in the ambit of service tax. And accordingly, the said works contract shall be valued as per rule 2A of Valuation rules(N/N 24/2012-ST). And since it is a new construction, 40% of gross amount charged shall be taxable(in case material and labour are not bifurcated, i.e. consolidated amount).
VAT:
It shall depend on the provision of the respective state in which the said works contract is executed.
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