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TMI BlogContractee’s responsibility under reverse charge (work contracts) as per amendments of Budget FY.12-13X X X X Extracts X X X X X X X X Extracts X X X X ..... Contractee’s responsibility under reverse charge (work contracts) as per amendments of Budget FY.12-13 X X X X Extracts X X X X X X X X Extracts X X X X ..... er change in service tax under the budget of FY-12-13 which should be kept in mind as a contractee? Thanks Jai Reply By Rajesh Sharma: The Reply: Dear Jai, As per the budget amendments to be effective from notified date service tax needs to be paid by both service provider and service recipient in certain cases if the service provider is Proprietary/PF/LLP/AOP and receiver is company: o Renti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng or hiring of motor vehicles- (to the extent of 60% by receiver and balance by provider in case of abatement otherwise 100% by receiver.) o Manpower Supply - (to the extent of 75% by receiver and balance by provider.) o Works Contract - (to the extent of 50% each. Reply By umesh kumar: The Reply: Dear sir, Thanks a lot your valuable guidance I want share more on this Suppose contract valu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e is Rs.1, 00,000 (Value of Material & labour) Assumed, Material value as per VAT act 75% Rs.75, 000 Assumed Service Tax portion 25% i.e. Rs.25, 000 Service Tax will be as per New Rate will be @12.36% on Rs.25,000 comes Rs.3,090 Now this Rs. 3,090 50% i.e. Rs. 1545 will be responsibility of contractee & have to be deposited by the contractee. Please suggest I am going on right track or any o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ther understanding is possible. Reply By Rajesh Sharma: The Reply: Dear Jai, You need to understand the whole concept of providing the % scheme as part of valuation rules. The provisions as provided in the notification prescribed that in a works contract the value of service needs to be arrived based on documents and books of accounts. However, in case the same cannot be arrived than value for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... service tax needs to be arrived at as per the % given in the each scenario. In the example given by you the service tax would be as follow; Value of contract including material - Rs. 100,000/- Service tax @4.8% (40% of contract value) 4800/- Edu Cess@2% 96/- SHE Cess @1% 48/- Now in case the service is received from Proprietary/PF/LLP/AOP and service receiver is a Co. than service tax liabi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lity would be discharged in the proportion of 50% each X X X X Extracts X X X X X X X X Extracts X X X X
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