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Service tax on work contract

06 July 2013

Compny made a single contract foe the works contract service& the contractor has raised 2 invoices, 1st for material used & other for services provided.

Will there be applcability of service tax on reverse charge mechanism & also of wct ?

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5 Replies

CA girl (Article Trainee-CA Final) (1942 Points)
Replied 06 July 2013

If the contractor gives the VAT & Service tax invoices separately..then Reverse charge mechanism wont be applicable for such works contracts..

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kishore kethe (internal auditor) (33 Points)
Replied 06 July 2013

When we get the 2 different invoices then it is not applicable to charge reverse mechanism

Prabhat Kumar (Advocate & Consultant) (1912 Points)
Replied 08 July 2013

THE FIRST THING IS APPLICABILITY OF SERVICE TAX,IN THIS CASE IT HAS TO LEVEID ONLY ON THE SERVICE PORTION OF THE CONTRACT.ONCE IT IS DONE THE SECOND QUESTION IS WHO WILL PAY THE TAX.AS PER NEW LAW IT WILL RECIPIENT AS WELL AS PROVIDER OF THE SERVICE 50% EACH IF PROVIDER IS INDIVIDUAL AND RECIPIENT IS BUSSINESS ENTITY.OTHERWISE IT WILL HAVE TO BE PAID BY SERVICE PROVIDER.

Sweta agarwala (student) (48 Points)
Replied 11 July 2013

No reverse charge is not applicable here because here two invoices are issued separately,one is for service provide and another is for material used,service tax is charged only on the amount of service provided.