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Service tax on government contracts (mes)

R C JAYAKUMAR (Others) (25 Points)

08 April 2015

Dear Sir,

I am a Defence Contractor (GovernmentContractor), Previous buget has exempted our services from service tax, But this 2015 budget says service tax is applicable.

a. If for exisiting contracts already signed and under execution is it applicable.

b. If tender is already submittted before 01.04.2015, and if we are lowest is it applicable.

c. Is Service Tax Deduted on Source (TDS) if yes what will be the percentage, and for what value.

d. We contractors execute work in two different ways, (i) Repairs and replacement of old and unservicable items.

(ii)New work, we say Project or provision of items, In the above case what eill be the tax burden.

e. If Service Tax is applicable, How we should register.

Regards.

R.C. JAYAKUMAR.

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4 Replies

Dheeraj (Learner) (1100 Points)
Replied 08 April 2015

A) yes service tax is applicable on u B) service tax will be levied from 1st April onwards C) tds is in income tax not in service tax, rate of serice tax is 12% plus cess D) works contract, service tax levied on 40% amt for original works nd on 70% amt for repair etc E) apply for regn in Form St-1

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R C JAYAKUMAR (Others) (25 Points)
Replied 09 April 2015

Thank you MR. Dheeraj, In this regard, If the tender was accepted before 31.3.2015 or even before (i.e) 31.12.2015 will the ST applicable. We have a clause stating IF ANY EXTRA TAXES ARE LEVIED IT WILL BE RE EMBURSED, Will it be applicable. More over no notification is received till date.

Ramchandra Sharma (Account & Administration Manager) (34 Points)
Replied 17 April 2015

Dear sir

We are a registered Society (NGO) working on sanitation programme for community under SWACHH BHRAT MISSION. Under this project we construct toilet for poor and trible population and handedour to individual for use. To run this project Rajasthan and Center Govt. contribution is Rs.12000/- per toilet and we club Rs.3000/- from CSR. we know that sanotation work for community is exmept but CSR Unit (Hindustan Zinc) duducte TDS on payment.

Second Hindustan Zinc gine us a new project to construct toilet unit in Government School under CSR fund. As per HZL terms they applied to deduct WCT from our bills, is it write and applicable or not on our works.