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TMI BlogCivil work - How to charge Servic Tax & VATX X X X Extracts X X X X X X X X Extracts X X X X ..... Respected Sir, We have to invoice for Civil work which includes 62% of Material and rest is Labour. How to charge both the taxes in single bill ?. State is Orissa. 1]Can we charge Service tax on 100% basic value and OVat on 62% material? 2]Or Service tax on 38% and OVat on 62%? Can we avail credit of Input service tax Cenvat credits? 3]Or should we charge service tax on 40% Ovat on 60 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... %? Can we avail credit of Input service tax Cenvat Credits? Thanks, - Reply By Pradeep Khatri - The Reply = Under OVAT, The rate of tax on the material involved in execution of works contract varies on the percentage of standard deduction of labour from the gross value of contract. On civil woks, the rate of labour, service and other like charges as a percentage of the Total val ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ue of contract varies from 15% to 30%. And under Service tax the tax liability can be calculated on following basis, namely:- Under Rule 2(A) On the 40% of the contract value or payment of 4.8% on the total value of the contract Furhter, provisions of partial reverse charge mechanism may be applicable if you are not a Company. - Reply By vijay kumar - The Reply = As far as servi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ce tax is concerned, since you know the value of the material exactly, pl follow rule 2A(i) of the Service Tax (Determination of Value) Rules, 2006 which states as follows: "Value of service portion in the execution of a works contract shall be equivalent to the gross amount charged for the works contract less the value of property in goods transferred in the execution of the said works cont ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ract." You can take cenvat credit on the input services and capital goods, but not on the inputs since their value is not included for the purpose of payment of service tax. You may raise separate invoices since the invoice under Rule 4A of STR, 1994 requires certain particulars to be mentioned. - Civil work - How to charge Servic Tax & VAT - Query Started By: - Bhalchandra Ramdasi Dated:- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 19-11-2012 Service Tax - Got 2 Replies - Service Tax - Discussion Forum - Knowledge Sharing, reply post by an expert, personal opinion Tax Management India - taxmanagementindia - taxmanagement - taxmanagementindia.com - TMI - TaxTMI - TMITax ..... X X X X Extracts X X X X X X X X Extracts X X X X
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