Ranjan (PROPRIETOR) (40 Points)
19 May 2012We have issued a Tax invoiced to XYZ party as follow…
Material Rs. 300000.00 Plus
Labour Rs. 200000.00
Total bill issued Rs.500000.00 And
tax charged likewise……..
Rs. 300000 X 5% (VAT) Rs.15000.00
Rs. 200000 X 10.3% (Service Tax) 20600.00
Final bill issued Rs. 535600.00.
Our nature of business is work contractor. My question is this is the right method for tax invoice?
Regards
Ranjan
prasad
(Service)
(41 Points)
Replied 19 May 2012
Service Tax is now 12.36 %....
I have also same problem....
plz any body help
Sonu Kumar
(Account Manager)
(665 Points)
Replied 20 May 2012
u have two options for Calculating Vat and Service tax in Work Contract
1. Composit Scheme
2. Non- Composit Scheme
In Composit scheme u ll have to Pay Tax on Total Revenue on given Rate by Government
In Non Composit Scheme u will have to Pay Tax on Statndered Rate But u ll Get deduction of Expenses.
as per me Above Calculation is Not Right
sajid
(Auditor)
(214 Points)
Replied 20 May 2012
CA Rahul Khatter
(Chartered accountant)
(97 Points)
Replied 21 May 2012
as per my knowledge in ur case it is divisible contract that means u knw what the portion of material and labour .. so just charge vat on material and ST on labour portion ,
mukesh
(accountants)
(29 Points)
Replied 21 May 2012
it is correct treatment if u have no composion scheme, because work contract is devisable into two part as per our constitution article 366, and work contrace is deemed sale so only sale element along with attributable profit of material supply shall be charged for vat and service charges along with attributable profit chargeable for service tax if your firm is not eligible small scale service provider.
Ranjan
(PROPRIETOR)
(40 Points)
Replied 24 May 2012
Thank you very much for your valuable replies.
Addition to above query, (this is A.Y. 12-13 query not current, hence service tax 10.3%)
As you all said the method is correct, but we also have issued some bills taking abetment of @ 67-33%
Like
Material supply @ Rs. 500000.00
VAT Charged @ 5% Rs.25000/-
Labour Supply 300000/-
Service Tax Charged 10.3% on 33% of Rs.300000/- @ Rs. 10197/-
Is this is the correct method?
we have only one service tax no.
Can an access avail benefit of abetment along with non composition scheme?
Regards
and thanks in advance
CA. NARAYAN BHANDARI
(Manager-Accounts)
(57 Points)
Replied 12 July 2012
For Indivisible contracts ( works Contract), As per New Service TAx Act the standard deduction has been given 60/70% for
where you are not able to distinguish the component of material and labour.
However, How to go about VAT ?
CA. NARAYAN BHANDARI
(Manager-Accounts)
(57 Points)
Replied 12 July 2012
As per LAst year AY 2012-13, for indivisble contracts other than constructions contracts, it was allowed 75% for VAT and 25% for Service TAx.
For example:
If Invoice VAlue before Taxes is 2,00,000.
Then 75% of 2,00,000= 1,50,000 is taken for 14% or 5% VAT= 21,000
and 25% for Service TAx @ 10.3% = 5000*10.3%=5150
So, total invoice value would be = 2,26,150.
But For now, as per NEw Finance Act Since for Service Tax, if you consider 70%, then are we considering just 30% for VAT purpose.............................????? And there is no ababtement for other than construction contracts and also 50% by recipient and 50% by service provider is only applicable for service provider being other than corporate sector.
Vinoth Kumar.S
(Accountant)
(21 Points)
Replied 28 September 2012
can any one help me on this
i done work contract and raised the invoice 100000 + Vat5% but i received the amount after deducating Work contract tax its is correct.
sajid
(Auditor)
(214 Points)
Replied 15 March 2013
Please give clear about your question. Nature of Work executed. How much TDS deducted. Place of the business.
Vardan Singh Sengar
(Accounts Manager in Private Company)
(433 Points)
Replied 29 January 2014
MY QUESTION IS
I WANT TO PREPARE ONE INVOICE IN TALLY WHERE THE TOTAL CONTRACT WORK AMOUNTED TO SAY 100 RS. WHERE 90% IS MATERIAL & 10% IS LABOUR. THERE ARE 8 ITEMS IN THE 100 RS WHERE ALL THE 8 ITEMS INCLUDES LABOUR TOO. NOW I WANT TO BIFORCATE ALL THE ITEMS & LABOUR IN THE RATIO 90% & 10% IN ORDER TO GIVE A CLEAR PICTURE FOR ITEM WISE LABOUR & MATERIAL....DO ANY BODY EXPERIENCED WITH THE SAME SITUATION..PLS DO GUIDE...THANKING YOU EXPERTS
Rajarajan
(AO)
(272 Points)
Replied 13 March 2017
Dear Sir,
I am an electrical contactor and I am going to execute an WC order awarded by a public sector Company for electrical works. I came to know that composite method cannot be adapted in case of electrical contacts. Instead I have to go for regular method.
Pl correct me if the following methodology is wrong
1. Segregate Sale and Labour Portion in the contract value.
2. Pay 14.5% VAT on the actual Sale portion which should be supported by proper documents.
3. Actual Value of labour portion which should be supported by labour vouchers and other valid documents and proper books of accounts is mandatory.
4. Pay Service Tax @ 15% on Labour Portion
5. Input tax credit is available on purchase in Kerala State.
6. Monthly Returns in Form 10
7. Invoiced in Format will be as Form 10
I request you to send me specimen invoice format (Form 8C) and Form 10 (monthly returns) for adherence.
I am registered dealer in Tamilnadu, in that case can I do stock transfer from Tamilnadu and if so what will be applicable tax.
Regards,
V. Rajarajan
CAclubindia
