Service Tax on Works Contract, Service Tax

[SANJAY BAHETI]

Respected All, My query is that suppose if the service provider has only charged VAT in his bill and has not charged Sevice tax in the bill,the provider is a Individual and we are a company. Dose this trancation qulify for works contract?If it is a works contract than on what amount the service tax should be paid under reverse charge? the amount is Rs. 41 Lacs including Vat.

Posts / Replies

[vasudevan unnikrishnan]

In the querry,the nature of service rendered /availed is not mentioned.Hope it is not mentioned in the negative list/mega exemption list.

However, if the individual in his bill for 41 lakhs has not paid service tax,it is a straight case of evasion,unless the service given  is in the negative list/mega exemption .

The reverse charge will be applicable to you on the service.,tax on the amount less of VAT is to be paid at the appropriate portin/percentage.

unnikrishnan.v. 

[Pradeep Khatri]

If the services come under reverse charge mechanism, then, othe ratio of liability will be 50-50.  Service tax,obviously will be paid on the service portion amount.  However, service tax can be calculated under composition scheme i.e. 4.8% on the total contract value or vivisected as per Rule 2A.