Payment of service tax - Invoice not issued

[Mohammad Ishaq]

dear sir, i completed work contract lamsum basis from 'Isar Engineers' value 1.2Cr which is from Rourkela Steel Plant (Sail) order value is 2.5 Cr, STC 29lacs isar is collected stc but as per our order i not issue any bill and collected st. but stc officer asking your not paid st what have to do?

[Ravi Chopra]

What is your query? Is it related to sales tax or service tax. Also give more facts and details.

[Mohammad Ishaq]

service tax

[madhavvan n]

as per provisions of works contract service under service tax you have two options to bill your customer ie rsp (i) charge service tax @ 10.30% on the value of services rendered excluding material supplied and vat ( you can bifurcate the entire material and service portion separately by putting it as per boq) or (ii) charge service tax @4.12% on total lumpsum contract value if you have followed either of the above options then you have discharged the service tax liability correctly after receipt of payment from rsp there should not be any dispute with the authority if above is followed

[Rama Krishana]

Once you have received the amount towards taxable service tax works contract, you have to pay service tax irrespective of the fact that you have raised / issued any bill or claimed service tax separately from the customer.

[Mohammad Ishaq]

tnx dear sir, iam sub contractor i am not raise the bill just main contractor is paid chaque payment

[Rajib Dass]

Hi Mr Mohammed, Whether U have raises the bill or not, is not a matter. Since you have received the Service Tax, You have to pay it to the Govt. The service tax amount is not your money. You have collected it on behalf of the Govt only. and further, You can not levy service tax on the cost of the items supplied by you and the VAT charged thereon. But in the case of the Labour contaractors, they can levy service tax on the whole of the bill amount including the service charges amount. For this one service tax notification is available.

AI Summary

Service tax liability: receipt of payment triggers obligation to remit tax even if no invoice issued. Receipt of payment for taxable works-contract services creates an obligation to remit service tax even if no bill or invoice was raised. Valuation may follow either segregation-charging tax on the service portion excluding materials and VAT-or a composite lump-sum rate on the total contract value. Amounts collected as service tax are held for the government and must be paid over. Goods value and VAT on goods should not be taxed under service tax, though specific notifications may affect labour contractors.