Briefly Giude about new amendment in Works Contract

[RAJNIKANT CHAUHAN]

Sir ,

Pl. briefly guide about new amendment in work contract

Warm Regards

Rajnikant Chauhan

[YAGAY and SUN]

Dear Rajnikant Chauhan,

Service tax on service portion in Works Contracts:

In Rule 2A of the Service Tax (Determination of Value) Rules, 2006, category „B‟ and „C‟ of works contracts are proposed to be merged into one single category, with percentage of service portion as 70%; this change will come into effect from 1st October, 2014. This rationalization by way of merger of categories has been made to avoid disputes of classification between these two categories. [Notification No.11/2014-ST].

Regards

YAGAY and SUN

(Management and Indirect Tax Consultants)

 

 

 

AI Summary

Service tax valuation in works contracts now fixes service-portion for valuation following category merger under amendment.
The amendment to Rule 2A of the Service Tax (Determination of Value) Rules, 2006 merges categories B and C of works contracts into a single category and prescribes the service portion at 70% for valuation, effected by Notification No.11/2014-ST to simplify classification and valuation of the service component.