prajapath.s.k. (manager accounts) (79 Points)
19 December 2011Hi, DEAR ,CA clubians
please let me know how to fill the form st3 for works contract or notificatiction 12/2003 users. its very urgent. i would like to know waht is the entry for gross amount i.e. matrl+ labour or labour only.
HOW TO FILL ST3 RETURN FOR WORKS CONTRACT
Nitin Jain
(CA)
(39 Points)
Replied 20 December 2011
Hi,
Before filing the return you have to calculate the service tax liability on the( labour cost portion only) work contract. for calculating this there are follwing three option available.
A-1 Option
Under the legal option A-1, "Material Value" of the Contract to be deducted from the gross contract value to compute the Labour cost.nd . The deductions are available for arriving at the Material Value from the total contract price. Such deductions are specified in the corresponding provisions of the state VAT Acts which are based on the guidelines given by the Supreme Court in the case of Gannon Dunkerley (88 STC 204) or the Contractors can arrive at the Material value / price of the Contract by adopting cost + value Addition method. In this method, the Contractor adds to the `Material Cost’ which is determined by considering all the purchase bills of the materials (imports, outside the State and within the State), the margin on such material cost plus any incidental expenses attributed towards the material value. In other words, the Contractor determines the Material Price after adding Material Cost and Margin to such cost .
However, in this option the Contractor has to maintain proper books of accounts and the other records to identify the material value of the Contract.
Option A-2
Under the legal option A-2, the service provider require to calculate the " value of services" as per rule 2A of Service Tax " Valuation Rules" and pay service tax at normal rates on such value.
In Both of the cases " A-1" and " A-2" Assessee can avail Cenvat credit of input services, inputs and capital goods.
Option-B -- Composition Tax (Alternative / Non legal option)
Option B is the “Composition Tax” option. This is a non legal alternative option, simplier option for those Contractors who cannot maintain the proper Accounts, Record of the material and other portion in their contracts. under this option 4.12 % is payable.
Under the “Composition” option, the Contractor has to pay Composition Tax on the total Contract value / price, No deduction of "value of material" is available in this option. Similarly, No CENVAT set off / Credit is available on the purchases of inputs material.
you can claim cenvat on input services and capital goods.
Please note that you can treat each work contract separately.
Rest is only filing of return, which could be file as you file for other taxable services.
Regards
25 Hours GST Scrutiny of Return and Notice Handling(With Recording)
Survey, Search and Seizure under Income Tax Act 1961
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