CA Finalist (Article Assitant) (289 Points)
27 July 2011A Private ltd. Co. makes a sale of Water Facility Equipment to a party at a cost of Rs. 20,00,000.
The above amount also involves Works Contract cost incurred towards the facility setup. However the break up of the Material Cost nor Service cost is not available.
At what percentage should Service Tax be payable ???
Can composition scheme of 4.12% be adopted by the Service provider?
CA Unnikrishnan Nair N
(Chartered Accountant)
(2083 Points)
Replied 27 July 2011
If it is predominantly supply of goods and labor involved in the erection is minor and incidental to supply, it is advisable to charge seperately for the erection. May be you are within the basic exemption of service tax on such labor charge. Otherwise, pay service tax @ 4.12% of gross contract amount.
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