Ajay s (Accounts Officer) (243 Points)
10 February 2011Dear All
One of our projects is in works contract. and it is a single work oder including supply. The work order is telling service tax is 4.12% and they will re-imburse the amount after producing chellan.
Now we received some amount and 85% of the amount is supply .Whether we have to pay service tax on 100% or 15%
Somewhere I heard that supply of materials have no applicability of service tax
CA SANDESH MAHIPAL
(Practicing in GST and MSME )
(1985 Points)
Replied 10 February 2011
YOU HAVE RIGHT HEARD THAT THERE IS NO SERVICE TAX CHARGABILITY ON MATERIAL
BUT
SUPPLY OF MATERIAL MAY BE A SERVICE....
THEN MAY BE SERVICE TAX SHOULD BE CHARGED.....
U S Sharma
(glidor@gmail.com)
(21063 Points)
Replied 10 February 2011
4.12% is charged with materials ( 60% abatement from gross charges for materials only), if we pay on pure service then its 10.3%
Ajay s
(Accounts Officer)
(243 Points)
Replied 10 February 2011
So pls tell me how much we have to pay
Pankaj Arora
(Learner)
(3134 Points)
Replied 10 February 2011
if its in work contract than you have to pay 4.12 % on amount.
Ajay s
(Accounts Officer)
(243 Points)
Replied 10 February 2011
U all pls clearly read my querry and give me a satisfied answer
Ganesh
(CA)
(111 Points)
Replied 11 February 2011
Dear Ajith,
The rate of 4.12% is a composition rate under Works Contract Service. This means, you need to pay service tax on both service + supply, i.e total value of the contract. In the given scenario, you need to pay service tax on the total amount received for this contract i.e 100%
Thanks,
Ganesh
CAclubindia
