Sohil (Learner) (631 Points)
16 February 2014Our society is doing repair works and have received quotation.
But the vat and st structure of all 3 tenders look different.
We gave contract to 1st tender and here it looks he is quoting 15.41% as vat and st whereas for others it stands around 12.4%.
Who is correct?(Pease download and rotate picture as i am facing problem uploading i)
https://i.imgur.com/RhXLMCk.jpg
Sidharth
(Article Assistant)
(80 Points)
Replied 16 February 2014
Dear sohil,
According to me all the three have wrongly charged services tax.
The work mentioned in the tender should fall under WCT(other works category).
WCT falls under partial RCM which means 50% is the laiability of service provider and 50% is the liability of service reciever.
It also carries an abatement of 40% i.e. 60% is the taxable portion.
So in case of 1st tender the calculation goes as follows :
ST to be charged by Service provider : (Total amt excl VAT)*50%*60%*12.36%
=703600*50%*60%*12.36%
= Rs. 26,089.488
The same amount of service tax should be paid by service reciever under RCM.
Experts do provide your feedback !
Sohil
(Learner)
(631 Points)
Replied 20 February 2014
You mean to say the society needs to pay the tax to st department directly or the contracted will forward the same.Also what about the. Vat rates?
Sidharth
(Article Assistant)
(80 Points)
Replied 23 February 2014
Service tax under Reverse Charge Mechanism (RCM) has to be paid by the soc directly to the ST department.
Service tax des not apply on VAT amount. ST is applied on Gross amount(excl VAT).
Sohil
(Learner)
(631 Points)
Replied 23 February 2014
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