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Please help me in Calculations

Biju.V (Accountant) (128 Points)

23 January 2010

WE ARE IN TO CONTRUCTION BUSINESS
WE RAISE INVOICE TO OUR CLAINTS LIKE THIS

GROSS AMOUNT	75000
VAT @ 12.5 ON 75% OF GROSS AMOUNT	7031
SERVICE TAX @ 10.3 ON 33.33% OF GROSS AMOUNT	2575
TOTAL AMOUNT	84606

IF OUR CLAINT PAY PART PAYMENT OF RS.50000/- HOW DO I CALCULATE WHAT IS THE SERVICE TAX INVOLVED IT????

PLEASE TELL ME THE CALCULATION

THANKS IN ADVANCE

BIJU

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4 Replies

Naresh Reddy (CA,Final) (123 Points)
Replied 26 January 2010

It is Depending up on our Assumptions i.e if u think Rs. 50,000/- Including All taxes calculate including tax.

I will clearly tell after some time ok.

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Poornima (Search on.... for knowledge) (129 Points)
Replied 04 February 2010

The amount of Rs 50000 is cum tax amount means it includes both VAT & Service Tax

also as per rules service tax liabillty comes on whatever amount is collected from debtors.

Calculation will be as below:

Gross Amount 44323

VAT on above( 12.5% on 75%) 4156

Service Tax on gross amount(10.3% on 33.33%) 1522

Total 50000

Prateek Anand (Service) (26 Points)
Replied 22 May 2010

Hi Biju,

Here is a formule that might help you in future as well. Since you people are in construction business, I would suggest you to go for compostion scheme for both VAT as well as Service Tax, simpler and hassle free.

x + (x*75%)*12.5% + (x*33%)*10.3% = Amt paid by client.

x + 0.09375x + 0.000343299x = Amt paid by client

1.094093299x = Amt paid by client

x = Amt paid by client / 1.094093299

x = Amt towards your construction services.

(x*75%)*12.5% = Amt of VAT liability on amt (x).

(x*33%)*10.3% = Amt on Service Tax liabilityon amt (x).

" And the above formule can be modified as per change in tax rates."

Have a great day.

Welcome ( For your thanks in advance)