Works Contract case, VAT + CST

[Srivatsan Krishnamachari]

Dear Experts,

Kindly clarify my below point :

a) Works contract under composition scheme : we are undertaking contract under WCT composition scheme. Where as in my supply, excisable material also involved. Now i wish to raise Excise invoice for the excisable material based on the cost +10% basis to avoid excise litigation and for the total value of bill with WCT and for service tax 40% value of the woks contract under 60% & 40% basis since ours is Original works. Please let me know this process is OK, if not, kindly suggest to meet all tax complications like WCT, SERVICE TAX & CENTRAL EXCISE.

Thanking you in Advance.

Srinivas

Posts / Replies

[YAGAY AND SUN]

You cannot charge both Central Excise Duty and Service Tax on the same transaction.

[MARIAPPAN GOVINDARAJAN]

I endorse the views of Yagay

[KASTURI SETHI]

Sh.Srivatsan Krishnamachari Ji,

I support the views of M/s. Yagay & SUN and Sh.Mariappan Govindarajan, Sir.

[Ganeshan Kalyani]

You are providing works contract service which is a service and Service tax is applicable. Excise duty will not be applicable.

[Mukund Thakkar]

Dear Srivatsan Krishnamachari,

it is seems your company is manufacturer and service provider both.

when you cleared goods you have to pay the excise duty.

and after the sales if you provide the service under WCT, you have to pay the service tax.

WCT is applicable as per your state VAT rules and pay Separately.

[KASTURI SETHI]

I further support the views of Sh.Mukund Thakkar, Sir. As per profile, the unit is engaged in the manufacture of excisable goods and is an SSI unit. If the unit has crossed threshold exemption limit of ₹ 1.50 crore, they will pay Central Excise duty. Regarding VAT & Service Tax position has already been cleared by the experts.