both vat and service tax on job work

[chetan kumar]

I saw.a purchase bill of job work. There was mentioned that only 60 percent of portion was taxable in VAT. . Entry was s below

party name. dr.

To cenvat

To Vat input

To surcharge on vat input

To job work(60 percent)

To jobwork taxfree(40 percent )

I had read that job work is either taxable under excise or st. But here entry is very diffrent.. Even in some entries excise, vat and st is chrged at once. Pls clear my doubt..

[YAGAY andSUN]

Please provide us with the details of item on which jobwork was conducted and name of the state to check the WCT.

[chetan kumar]

That company ws auto part manufactoring company in punjab.

[YAGAY andSUN]

Please check the appended table and determine the category of your job work to deduct the labour portion involved in the Job Work conducted by the Job worker as on the net amount (gross amount - Labour charges % as shown below) the VAT under PVAT would be payable.

TABLE

Serial. No.	Type of contract	Percentage of the total value eligible for deduction
1	(a) Electrical Contracts:-
	(i) H.T Transmission lines;	Twenty percent
	(ii) Sub-station equipment;	Fifteen percent
	(iii) Power house equipment and extensions;	Fifteen percent
	(iv) 11 and 22 KV and L.T distribution lines 12+5; and	Seventeen percent
	(v) All other electrical contracts.	Twenty five percent
	(b) All structural contracts	Thirty five percent
2	Installation of plant and machinery.	Fifteen percent
3	Fixing of marble stabs, polished granite stones and tiles (other than mosaic tiles.)	Twenty five percent
4	Civil works like construction of buildings, bridges, roads etc.	Thirty percent
5	Fixing of sanitary fittings for plumbing, drainage and the like.	Fifteen percent
6	Fabrication and erection of structural works of iron and steel including fabrication, supply and erection of Iron trusses, purfins and the like.	Fifteen percent
7	Fabrication and installation of cranes and hoists.	Fifteen percent
8	Fabrication and installation of elevators (lifts) and escalators	Fifteen percent
9	Fabrication and installation of rolling shutters and collapsible gates	Fifteen percent
10	Installation of doors, door frames, window frames and grills.	Twenty percent
11	Supply and installation of air conditioners and air coolers	Fifteen percent
12	Supply and installation of air conditioning equipments including deep freezers, cold storage plants, humidification plants and dehumidres.	Fifteen percent
13	Supply and fixing of furniture and fixtures, partitions including contracts for interior decorators and false ceiling.	Twenty percent
14	Construction of Railway coaches and wagons on under carriages supplied by Railways.	Thirty percent
15	Construction of mounting of bodies of motor vehicles and construction of trailers.	Twenty percent
16	Supply and erection of weighing machines and weigh bridges.	Fifteen percent
17	Painting, Polishing and White Washing.	Twenty five percent
18	Laying of pipes.	Twenty percent
19	Tyre retreading	Forty percent
20	Dyeing and printing of textiles	Forty percent
21	Printing of reading material, cards, pamphlets, posters and office stationery.	Forty percent
22	All other contracts.	Thirty percent”

[chetan kumar]

Thnx for reply. I want to known that is it possible that excise, vat and st are charged on same job?

[YAGAY andSUN]

If excise is leviable, then, service tax would not be applicable and vice versa. However, either along with Excise or service tax, VAT/CST or WCT can be leviable.

[chetan kumar]

Service tax will not be levied on service portion(40 percent)? ? in most of entries is was not levied.. But in some entries it ws being levied on service portion.

AI Summary

Taxation of job work: excise and service tax are mutually exclusive, while VAT or WCT may also apply. Accounting entries split job work invoices into taxable and tax free/service portions; where excise duty is leviable service tax generally does not apply, and where service tax is leviable excise does not apply. VAT/CST or works contract tax may be imposed in addition to either excise or service tax under State law. Taxable VAT is computed on the net amount after deducting the labour/service component percentages referenced in the industry allocation table.