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

Works contract service: single civil contracts attract deemed taxable value and reverse charge may shift liability to the recipient.
If a single contract covers civil works, the entire supply is a works contract service and the supplier computes tax on the deemed taxable portion of the gross bill; the taxable base must include value of materials and consumables supplied free by the recipient. Where the recipient is a company and the provider an individual or partnership, the receipt-based reverse charge mechanism requires the recipient to discharge the balance of service tax not charged by the provider.