Chartered Accountant
39039 Points
Joined September 2008
Presumably you are paying the composition method of paying 6% VAT on the whole value of WC as you are unable to determine the actual value of materials transferred/ involved.
However for some time- ( 2007 onwards) the fact that there is a service component has been established by courts.
The options for payment of ST are as under:
1. Deduct the actual value of material involved. If balance is less than 10 lakhs cliam the exemption. Beyond that pay ST on the balance after deducting the value of material.
2. If not determinable examine exemption as a small service. If eleigible claim. Beyond that pay ST on 40% on the original construction or 70% on others