Works Contract Service

[SANDESH SHINDE]

Dear Sir,

Under Works Contract Service if the Service provider is not considering any 40% or 70% of works contract service. In case of AMC He is just charging 50% of 14% i.e 7% his Service Tax portion and balance 50% of 14% i.e 7% Service tax rate to be paid by us as service receipent.Therefore please explain us whether it is correct. He is not charging any Vat.Thanks & Regards

AI Summary

Service Tax on Works Contract: 50% by Provider, 50% by Recipient Valid if No Goods Supplied. A participant in a discussion forum inquired about the correct application of service tax under a Works Contract Service, specifically regarding a service provider charging 50% of a 14% service tax rate, with the remaining 50% paid by the service recipient. The response clarified that this practice is legally correct, provided the service provider does not supply goods and charges service tax on the entire service portion. The abatement of 49% or 70% applies only if the service provider pays tax on the full contract value. No VAT is being charged in this scenario.