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TMI BlogService tax under Works contractX X X X Extracts X X X X X X X X Extracts X X X X ..... Dear Experts, I need clarification on below issues related to Works contract Service tax. a) How to calculate WCT (VAT) payable in the works contract scenario, under composition scheme and non-composition scheme b) Benefits in Composition and in non-composition schemes c) What is the service tax amount i need to pay and how to calculate the same. d) Do i need to submit any forms before exe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cution of the works contract to Sales Tax dept. e) Any other useful info related to the WCT SERVICE TAX. Thanking you in advance Regards Srinivas - Reply By Ganeshan Kalyani - The Reply = Sir, the Works Contract Tax is a very hot topic in Taxation. Lots of cases are pending before the authority. The taxability of free issue of material given by receiver of service to the contractor. All ar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e debatable. Thus we would like to solve your specific query rather than giving general information which will create sea of doubts. Thanks. - Reply By KASTURI SETHI - The Reply = Sh. Srivatsan Krishnamachari Ji, Rightly advised by Sh.Ganeshan Kalyani, Sir. Concrete solution is possible only after going through the terms and conditions of the Contract executed. However, preliminary infor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mation can be provided.Point-wise reply is as under: a. VAT is not my area. b. In composite project, you are entitled for abatement @ 60% in respect of Original Works i.e. ST is to be paid on Service Portion @ 40% in terms of Rule 2A of Service Tax ( Determination of Valuation) Rules, 2006) and facility of RCM is available under Notification No.30/12-ST. 50% liability is on the ser ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vice receiver and 50% on the service provider. In case of construction service without material i.e. only pure labour is involved, no abatement and no RCM is allowed. The whole liability will be cast on Contractor/Service Provider. Pure labour cannot be classified under Works Contract Service. In this situation, construction service would fall under the erstwhile category of 'Construction of R ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... esidential Complex or Commercial or Industrial Construction. When pure labour is involved, the question abatement and RCM does not arise. c.. In case of Composite project, you will pay ST @14.5% (15% w.e.f.1.6.16) including SBC and KKC after availing abatement or after arriving at service portion under Notification No.24/12-ST and thereafter it is to be shared 50 :50 ( Notification No.30/12 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... -ST dated 20.6.12 as amended). d.It pertains to VAT. e. Any specific query ? - Reply By Srivatsan Krishnamachari - The Reply = Dear sir, Thank you for your detailed reply. Regards Srinivas Chaganti - Service tax under Works contract - Query Started By: - Srivatsan Krishnamachari Dated:- 23-5-2016 Value Added Tax - VAT-CST - Got 3 Replies - VAT and Sales Tax - Discussion Forum ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... - 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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