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New service tax

surender (Manager Accounts) (149 Points)

16 July 2012

Dear experts i have some quires below :
1. A Co. is in manufacturing contract with B.co. a gives service tax invoice to B for expenses and conversion cost. what will be new percentage of service tax for A & B?

2 If any service provided in the month of June-12 and invoice raise on july 1st week. A have to charge service tax from B as per new notifications?

3. A hires casual manpower from labor contractor. what will be new percentage of service tax between A and Labor contractors if already contract executed with manpower supplier ?

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1 Replies

CA Unnikrishnan Nair N (Chartered Accountant) (2083 Points)
Replied 16 July 2012

1. If job work amounts manufacture, no service tax. If not, service tax is chargeable @ 12.36% of the conversion cost. Exclusion of reimbursements subject to condition of pure agent.

2. Point of taxation is the date of bill or receipt of payment which everis earlier .

3. Labor conatrctor is liable to service tax. Reverse tax meachanism applies in the ratio 25:75.