Work Contract

[Samik Chaudhuri]

Sir

We are manufacturing Co. Our contractor raises various Bill for Earth cutting, Tripper Hiring Charge, Civil Works. I would like to know whether we have to pay total service tax 12.36% on Bill value for Earth cutting or 40% of Bill value for Civil Works. Please suggest me.

With thanks and regards

Samik Chaudhuri.

AI Summary

Service Tax on Civil Works: 40% of Bill Value Taxed; Reverse Charge Applies for Private Companies and Individual Contractors. A manufacturing company inquired about the applicable service tax rates on bills for earth cutting and civil works. The response clarified that if the contractor has a single contract for civil works, the service tax should be charged on 40% of the bill value, including any free materials and consumables provided by the company. Additionally, if the company is a private or limited company and the contractor is an individual or partnership firm, the contractor charges 50% of the service tax, with the remaining 50% payable by the company under the reverse charge mechanism.