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Work contract services

CA.K.C.MAHATO (FINANCE CONTROLLER,) (60 Points)

22 May 2014

DEAR SIR,

PLEASE CLARIFY THE NOTIFICATION NO.7/2008-S.T./DATED 1.03.2008.

A works contract service providers opts composition scheme @ 2% tax rate on gross value charged. after notification rate changed to @ 4% . Please advice, if company take a project before amendment and they paying @ 2%. Can it possible untill the similar projects are completed after amendment ,they paid @ 2% tax instead of @ 4% .

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4 Replies

Vikas (CA) (1135 Points)
Replied 26 May 2014

Dear Mr. Mahato,

In my opinion, you may refer to the Reliance Industries Ltd' 2010 decision, wherein the Hon'ble Guajarat High Court held that the rate prevailing at the time of rendering of service shall be levied for Service tax.

Therefore, I believe, this being a continuous supply of service, the Service tax shall be charged @ 2% on the services provided prior to the amendment date (you may refer to the invoices raised in this respect) and thereafter @ 4%.

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CA.K.C.MAHATO (FINANCE CONTROLLER,) (60 Points)
Replied 27 May 2014

Dear Vikas,

Please provide the exact case name of realiance industries ltd. vs.................2010.high court

thanks.

Vikas (CA) (1135 Points)
Replied 27 May 2014

1.Commissioner of Central of Excise & Customs vs. Reliance Industries Ltd. 2010 (19) S.T.R. 807 (Guj.);
2.Commissioner of Service Tax vs. Ratan Singh Builders Pvt Ltd 2013-TIOL-403-HC-Del-ST.