Painting work with material

[Guest]

Dear Sir,

We have given painting contract to party with material. He has furnish the work and now he is trying to submit an invoice. Please explain how can calculate service tax and VAT.

Thanks & Regards,

Sanjay Vasava

[Himansu Sekhar]

If the material component is segregated in the invoice and the tax on the full value will be levied on the service value

If the material component is not segregated, the tax will be levied on 40% of the Gross value.

If it is a repair & maintenance activity, s.tax will be on 80% of the value.

[Mr Rao]

Dear querist,

I endorse the views of shri Himanshu Sha, an expert with slight correction in respect of taxable value being 70% in place of 80% when material value is not identifiable.

[Himansu Sekhar]

Ok it should be 70%. I made a mistake

AI Summary

Service tax valuation for painting contracts clarified: segregated material taxed on service element, otherwise prescribed gross-value portion applies. When material is separately invoiced, service tax applies only to the service element; where material is not separately shown, the discussion records consensus that 70% of the gross contract value is the taxable value for service tax purposes in painting contracts with supplied material.