Works Contract case

[Srivatsan Krishnamachari]

Dear Experts,

Kindly clarify my below point :

a) Works contract under composition scheme : we are undertaking contract under WCT composition scheme. Where as in my supply, excisable material also involved. Now i wish to raise Excise invoice for the excisable material based on the cost +10% basis to avoid excise litigation and for the total value of bill with WCT and for service tax 40% value of the woks contract under 60% & 40% basis since ours is Original works. Please let me know this process is OK, if not, kindly suggest to meet all tax complications like WCT, SERVICE TAX & CENTRAL EXCISE.

Thanking you in Advance.

Srinivas

AI Summary

Experts Clarify Tax on Works Contract: Excise Duty for Goods, Service Tax for Services; Ensure Compliance with VAT Rules. A participant sought advice on handling tax implications for a works contract under the composition scheme, involving excisable materials. The consensus among experts was that both Central Excise Duty and Service Tax cannot be charged on the same transaction. It was clarified that as the company is both a manufacturer and service provider, excise duty applies to goods clearance, while service tax is applicable to services under the Works Contract Tax (WCT). Compliance with state VAT rules was also emphasized. Experts agreed that if the unit exceeds the exemption threshold, Central Excise duty must be paid.