Value for SBC, Service Tax

[Mangesh khedkar]

Dear sir,

We had given contract to SSI vendor in composite work (work contract service). vendor consider 70% value for service tax & 100% value for vat hence which value applicable for swachh bharat cess.

Posts / Replies

[Rajagopalan Ranganathan]

Sir,

For charging SBC the abated value on which service tax is paid is to be taken.

[Ganeshan Kalyani]

I agree with the reply submitted by Rajagopalan Sir.

[YAGAY AND SUN]

Dear Mangesh,

In Maharashtra VAT Laws under Works Contract Tax, your vendor has option to levy VAT/WCT in following three way, namely:

1. On Actuals
2. On abated amount
3. Under Composition Schem

If your vendor charges VAT/WCT on 100% value then it means charges on VAT/WCT on service portion also which is not the mandate of VAT Laws. Discuss with your SSI Vendor about the correct levy of VAT/WCT under MVAT Act read with rules made there under.

Regards,

YAGAY and SUN

(Management, Business and Indirect Tax Consultants)

[Ram Babu singh]

SBC shall be charged on value of service portion i.e 70% of the value of work contract.

[Ganeshan Kalyani]

Yes it has been cleared by CBEC that SBC is a levy alike service tax and hence it will be charged like that of service tax.

[CA Surender Gupta]

Yes, I fully agree with the views as above of the experts.

If service tax is exempt, SBC will be exempt.

Where service tax is chargeable on abated rate, sbc will be charged at abated rate also.

Where service tax is charged at full rate on reduced value, sbc will also be charged at full rate on reduced value.

[MARIAPPAN GOVINDARAJAN]

The views of Shri Surendra Gupta is self explanatory.