TaxTMI 
TaxTMI 
My client is a works contractor opted for composition scheme paying service tax at 4.12% but Aervice Tax audit officers object to it based on Section 2A(I)(i) & (ii) of Service Valuation Rules 2006.They insist that my clients should have opted for composition under State VAT laws also,then only they are eligible for Service Tax Composition Scheme under Notification No.32/07 ST.Is it correct,give detailed reply.
Servicetax on WCT under Composition Scheme.
10 Dec 2010 
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Composition scheme for works contractors: service tax eligibility is independent of VAT composition registration, allowing separate opt in.
Availability of the composition scheme for works contractors under service tax is governed by the Work Contract (Composition) Rules, 2007 and does not depend on any parallel opt in under state VAT composition schemes; opting for service tax composition is an independent election under service tax law and cannot be denied solely because the contractor has not availed a VAT composition option. (AI Summary)
Availability of the composition scheme for works contractors under service tax is governed by the Work Contract (Composition) Rules, 2007 and does not depend on any parallel opt in under state VAT composition schemes; opting for service tax composition is an independent election under service tax law and cannot be denied solely because the contractor has not availed a VAT composition option. (AI Summary)