Clarification reqd. on service tax - works contract

1464 views 3 replies

Hi All,

With regard to the recent amendment in Service tax, require clarification on the following with regard to Works contract - original works;

 

i)  has the composition scheme been scrapped wef 1 July 2012? i.e. the option to pay service tax on 40% of the invoice amount? (the materials are all misleading)

ii) with the reverse charge mechanism in place, is the 50% borne by the service recevier to be paid of his/her pocket  or is that 50 % to be withheld from the service providers liability and paid on his behalf by the service receiver?

 

Thanks.

- Mike

Replies (3)

From 01-07-2012. for original contracts , 40% of the total amount charged is the value of service. Comsposition scheme of paying 4.8% of the conatrct amount has been scrapped w.e.f.01-07-2012. But effective rate is same. 50% to be paid by the service receiver can be withheld from payment if he charged entire tax on you.

Thank you

detail of works contract 

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