Calculation of Service Tax

[Srivatsan Krishnamachari]

Dear Experts,

Kindly Clarify how to calculate Service Tax in case of Works contract case and

a) do we need to submit any letter to the department

b) we have paid Sales Tax as per WCT

c) How to calculate Service tax amount

d) in the pricing excisable material values is only 40% of the Value and rest of the amount is civil / freight / site development and other charges which are non excisable.

Kindly clarify.

Thanking you,

Srinivas

AI Summary

Clarification Sought on Service Tax for Works Contracts: Rule 2A Guidance and Exemptions Under Notification No. 25/2012-ST A forum discussion addresses the calculation of service tax for works contracts. The initiator seeks clarification on service tax calculation, considering that only 40% of the contract value involves excisable goods, while the rest includes non-excisable civil works. Experts clarify that service tax is applicable only on the service portion, not on sales tax, and provide guidance on determining the taxable amount based on rule 2A of the Service Tax Rules. They also discuss potential exemptions under Notification No. 25/2012-ST for government-related construction activities, noting conditions for eligibility based on contract dates.