Service tax on Labour component by CCL

[SIDDHARTHA NANDI]

In a case of my client , CCL has given service tax @ 12.36 % on 25% of total bill amount , assuming that the 75 % of bill amount is for material component and 25% is labour component for the year 2014 -15 .Accordingly the return was filled . Now service tax department says that there is no such provision of service tax , and he has to pay service tax on 70 % i.e after abatement of 30% . The party is registered under works contract under service tax. Please advice ...

AI Summary

Client Disputes Service Tax Calculation; Rule 2A Review Sought for Clarification on Labor and Material Split. A client was charged a service tax by CCL at 12.36% on 25% of the total bill, assuming 75% was for materials and 25% for labor for the year 2014-15. The service tax department later required the client to pay tax on 70% of the bill, after a 30% abatement. The client is registered under works contract for service tax. A respondent advised reviewing Rule 2A of the Service Tax (Determination of Value) Rules, 2006, and requested further details on the nature of the work performed.