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

Works contract valuation: service tax applies to the service portion after excluding value of goods; exemptions may depend on contract date.
Service tax on a works contract is payable on the service portion obtained by deducting the value of property in goods transferred from the gross contract value; gross amount excludes any value added tax or sales tax. The service portion includes labour charges, subcontractor payments for services, planning and design fees, hire of machinery, consumables used in execution, attributable establishment costs, similar service-related expenses, and profit attributable to services. Exemptions for government contracts exist but may be subject to a contract-date condition.