TaxTMI 
TaxTMI 
Service Tax on Works Contract
26 Nov 2010 
3 Replies 
1569 Views Asked by
Works contract service tax: composition or valuation options, exemption under notification may not apply and is risky.
Service tax for works contracts is governed by two main options: elect the Works Contract composition scheme, which levies a flat composition on contract value and disallows cenvat credit, with contract value including inputs and input services but excluding tools, machinery and state taxes; or calculate tax under Rule 2A of the Valuation Rules. The applicability of Notification 12/2003 ST exemption for goods sold is disputed and treating it as available for works contracts is considered legally risky. (AI Summary)
Service tax for works contracts is governed by two main options: elect the Works Contract composition scheme, which levies a flat composition on contract value and disallows cenvat credit, with contract value including inputs and input services but excluding tools, machinery and state taxes; or calculate tax under Rule 2A of the Valuation Rules. The applicability of Notification 12/2003 ST exemption for goods sold is disputed and treating it as available for works contracts is considered legally risky. (AI Summary)
Dear sir, Any Exemption have from Service Tax on Works Contract Please give Notification or any other details, Thanking You, V.Laxmaiah.Sudhakar Polymers Limited