Rate of Service Tax under composite scheme, Service Tax

[PAWAN KUMAR SHARMA]

There is some confusion that what rate is applicable under Composite scheme e.g. In case of Painting Jobs vendor is charging the rates of service tax @ 3.433 % (which is 1/3rd of the effective rates of tax i.e. 10%) But another vendor is charging the tax on the same Job @ 4.12& Now want to know the service tax rates on the composit scheme in which material + labour both components are there.

Posts / Replies

[Brijesh Verma]

Rate of tax is 4% + Applicable Cess which makes it to 4.12%. However, recent circulars have clarified that in case of contracts entered into prior to 1-6-2007, where tax has already been paid under any existing category, then the same rate would continue to apply in those cases. Your other contractors might be using those rates.