new construction work

[vikram singh]

Dear Experts,

Please guide which one is correct, there is two (below) scenario of new construction work under service tax 40% (taxable) & 60%(exempted) ,

1. In this case one company charge service tax on 40% @14.5% (supply and apply include)
2. In this case another company charge service tax on 40% @14.5% and Sale tax on 60% @5% (supply and apply include)

Regard

Vikram

AI Summary

Debate on Service Tax and Sales Tax for Construction Contracts: Rule 2A and VAT Registration Explained A discussion on service tax and sales tax applicability for new construction work involves two scenarios. One company charges service tax at 14.5% on 40% of the contract value, while another charges the same service tax plus a 5% sales tax on the remaining 60%. An expert clarifies that the 60% is not exempt but is an abatement under a specific notification. The applicability of VAT/sales tax on this portion is debated, with experts suggesting consulting a VAT specialist. Rule 2A of the Service Tax Rules is referenced for determining service tax, and the importance of VAT registration based on turnover is highlighted.