Service tax valuation

May i know what type of contract it was.??

Construction services along with material

If it is a maintanence or repair work or any finishing work like painting etc., Service tax is applicable at 70% and the Vendor is charging right. In case, it is a complete new construction or addition or alteration of any structure or land then it is a original work and service tax is payable at 40%.

Dear it's clear for me.

i just want to ask under normal situation. this is the situation under composite. In normal situtaion if he mentioned labour part in his invoice then we should charge STax on labour portion. Kindly correct if i am wrong.

No Service Tax is applicable on whole gross amount and not only on labour portion.

Dear Rahul verma

If bifurication of Labour amount is available service tax need to be charged only on labour

If there is no bifurication service tax need to be charged on whole amount applying appropiate abatement

Thanks guyz..

As i said he is mentioning amount of labour in seprate sheet attached along with invoice. It was said to us that following amount is for the calcuation of ESI amount. But i am saying if he is bifurcating amount of labour then why not considering for Service Tax purpose.

Kindly confirm.

Dear Rahul Verma

That is the service provider's discretion how to value a service. He might be unaware of various options. Just explain him that he have two options and follow which is beneficail so that even cash outflow to your clients will decrease.

Thanks guys

Look if he is providing service in relation to professional then you should deduct TDS @ 10% u/s 194J ohterwise u r liable for deduct TDS @ 2% or 1% as the case may be.