Tax on aluminum fabricating work

others 5348 views 3 replies

VIRENDER SINGH GUSAIN

ACCOUNTS EXECUTIVE

46 Points Joined July 2012

Dear Sir,

I am doing some almunium fabricating work in my flat at Patparganj, Delhi. The contractor is doing complete work, He removed old work from the flat and fixed new alumunium partition, sliding/openable window, glazing and others. He purchased all the materials himself like, aluminum, glass, rubber and other materials.

I asked him to submit his bill, he suggested if i will demand pucca bill, then he will raise 12.5% tax for fabricating work. so, My query is :

what % of tax he should charged on Aluminium fabrication works like aluminium doors, partitions, sliding / openable windows, glazing, clading etc . an assembly of Aluminium extruded sections, glasses & hardware materials as per the requirement.

The total cost of the work is Rs. 55,000 to 60,000/_ (appx).

Virender singh Gusain

9968091682

New DELHI

13.07.2012

Replies (3)

Mayank Saraogi

Learner

170 Points Joined March 2010

If he gives u a bill, in which the materials used and labour charges are shown sepratley then ST @ 12.36% will be charged on the labour charges and VAT 4%(say) will be charged on the materials used. If he gives u a composite bill were labour charges and materials are not shown sepratley then he will charge u @ 12.36% ST.

Not very sure, please wait for others to reply.

AK

Sales

100 Points Joined June 2010

Service tax is only on service portion of the works contract and VAT/Excise on Material portion.

Even if you get pucca bill, chances are less that the tax will be deposited with government.

That is why govt. brought in the draconian reverse charge laws wef 1-July-2012 where service receiver has to get registered and pay service tax on 75% of value of services in works contract...If you are individual then no worry. But if you are small business then you have to get yourself registered with service tax and pay it before 5th of next month...

Unfortunately what govt. does not realise is that these kind of laws with only encourage kuccha business instead of pucca. So they must bring down service tax rate to 6% to get good compliance.

MJ Krishnamurthy

ACCT(Retd)

7197 Points Joined July 2010

Mr VS Gusain

The vat on alluminium sections used in the fabrication will be @ 4%(may be now 5%),Here 75% of the value is supposed to be that of material and 25% of labour and services. VAT is chargeable @ 4%(or 5) on Rs45,000/- and 12.36% on 15,000/.

As responsible citizens we should ask for pucca(regular) invoice,but tax evasion is so rampant,that your contractor most probably won,t pay it to the govt.Now it is upto you.......MJK