Go AD-Free with CAclubindia Pro and get a FREE CCI Coffee Mug. Subscribe Now!

Service tax works contract

SAM SAM (Professional) (58 Points)

27 November 2015

SERVICE TAX WORKS CONTRACT is now taxable at 40%of Contract value on Composite basis

Is it correct ?

Please clarify whether the cost of land to be included in the total contract value to arrive at taxable service

SAM

Reply
Follow
Share

6 Replies

Manikanth (Chartered Accountant) (342 Points)
Replied 27 November 2015

As per the Rule 2(ii) of Service tax Valution rules, Service tax can be paid as per the composition scheme. So, if it is Original Works, ST will be payable @ 40% of the total Works

Here the total works does not include cost of land.

1 Like

Upgrade to CAclubindia Pro. Subscribe Now!

Madhukar N Hiregange (Chartered Accountant) (39039 Points)
Replied 27 November 2015

The value of land is allowed as a deduction in a contract. One option is to pay ST on 40 % which is to be calcuated on the construction portion only. However the value of land may have to be justified as deduction claimed.

1 Like

Balasubramanyam kuchimanchi (Partner) (23 Points)
Replied 27 November 2015

Dear sir

I have a doubt sir

We are doing a project where in we are given a office space n we are to furnish so what is the percentage of service tax 70% or 40% of total amount. . Material we only purchase

Sir another help we registered under service tax 2 months back n paid service tax on one bill (as we raised only one bill) now can we avail that 10lacs benefit sir pls help me out from this . Thank you so much sir

CA Abdul Haseeb (Employed) (147 Points)
Replied 27 November 2015

can you describe the contract particulars. What exactly is the service provided?

SAM SAM (Professional) (58 Points)
Replied 27 November 2015

Thanx Mr.Manikanth

Upgrade to CAclubindia Pro. Subscribe Now!

CA Bijay Shrestha (Never Give up....No matter what....) (858 Points)
Replied 27 November 2015

in case of real estate companies where they generally enter into JDA, they outsource civil construction, pay st vat etc and collect same from customers also. now my question is service tax to be accounted under work contract or construction service category by these companies ???? what is difference between these two categories ?? can the assessee opt any category at his choice ????