Go Ad-Free on CAclubindia with Daily Mobile Updates. Subscribe Now!

Service Tax Rate on Work Contract Service

Sorabh Gupta (Manager ( Taxation )) (877 Points)

27 October 2009

Dear All

Please tell the rate of service tax in case of WCT contract.

Reply
Follow
Share

5 Replies

Gautam Joshi (Partner) (361 Points)
Replied 27 October 2009

Hi Saurabh,

If you are falling in Works Contact Service (which is effective from 01.06.2007) then you are required to pay service tax @ 10.30% from 24th Feb 09.

There is a compounding scheme as well for payment and effective rate is 4.12% but then you need to forgo the benefit of CENVAT.

Tell me your service classification in specific so that your rate can be decided as there are abatement notifications for different services.

Regards.

Upgrade to CAclubindia Pro. Subscribe Now!

Sorabh Gupta (Manager ( Taxation )) (877 Points)
Replied 27 October 2009

Gautam

Thanks for your reply. Till i have some doubts so can we talk furthue on telephone.....I m from delhi & tell me ur contact no. so that i can contact to you or you can contact to me....09911777646.

Madhukar N Hiregange (Chartered Accountant) (39034 Points)
Replied 28 October 2009

Alternative rate for WC are:

1. Pay 10.3% on gross amount - avail credit on inputs + Input services + Capital Goods

2. Pay on labour amount ( if VAT paid on say 70%) then on 30% ST is to be piad.

3. Composition 4.12%.

Avinash sinyal (CA final) (34 Points)
Replied 10 December 2009

can ny 1 explain me abt works contract & its implications ................ its very urgent

Madhukar N Hiregange (Chartered Accountant) (39034 Points)
Replied 11 December 2009

Pl see articles section as topic is too wide and your query too general. Basically it is a composite contract where materials and services are provdied together and therefore the VAT/CST is chargeable along with ST in most cases.