works contract

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..... works contract
Query (Issue) Started By: - Samik Chaudhuri Dated:- 28-7-2016 Last Reply Date:- 17-9-2016 Service Tax
Got 6 Replies
Service Tax
Sir Our manufacturing co engaged contractor to construct the new building and inner road development etc. It is to be mentioned here that 90% material will be supplied by our company and rest 10% (Bricks & sand) will be supplied by the contra .....

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..... ctor. Now i would like to know whether service tax will be calculated on only service portion or the including the total material with service portion. Pleas advise me. With thanks & regards Samik Chaudhuri. Reply By SHIVKUMAR SHARMA: The Reply: Dear Sir As per my view you have to pay service tax on 40% of total cost of Works contract.the Example given as under.: Cost of Labour with material .....

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..... (as per service provider/contractor) Rs. 10000 Cost of material supplied by service receiver ( Free of cost) Rs. 40000 Total cost Rs. 50000 Service tax 14% on 40%of ₹ 50000/- 2800 SBC 0.5% -do- 100 KKC 0.5% -do- 100 TOTAL TAX 3000 50% TAX TO BE PAID BY SERVICE RECEIVER ON RCM 1500 1500 LESS : COST OF MATERIAL FREE SUPPLIED BY SERVICE RECEIVER 40000 BILL TO BE RAISED BY CONTRACTO .....

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..... R 11500 Reply By Ganeshan Kalyani: The Reply: Sir, practical solution given by Sri Shivkumar Ji. There are several issues under litigation on the subject. If amount is substantial then one should go as per provision of Section 67 of the Finance Act 1994. Thanks. Reply By Ganeshan Kalyani: The Reply: Sir, also see the rules applicable for reverse charge mechanism as per Notification No. 30/2012 .....

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..... -ST as amended. Thanks. Reply By KASTURI SETHI: The Reply: Regarding inclusion/exclusion of free supply of material into the gross amount, the issue is pending with Supreme Court. In the case of Pratibha Constructions Engineering and C(I) Pvt. Ltd. I endorse the views of Sh.Ganeshan Kalyani, Sir. Reply By YAGAY AND SUN: The Reply: Enriching my knowledge through your perfect replies. Please al .....

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..... so share the Citation of Pratibha Constructions Engineering and C(I) Pvt. Ltd. 2014 (8) TMI 627 - CESTAT MUMBAI Reply By Ganeshan Kalyani: The Reply: Thanks for touching the query /topic M/s. YAGAY AND SUN.
Discussion Forum - Knowledge Sharing .....

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