Work Contract Tax

[Ranjana Trivedi]

My company worked as a Contractor and Vat & service tax both are applicable but my question is that what is the percentage of WCT. there are two options - 1. 67% of job Value vat is 12.5% and 33 % of job value service tax applicable 2. 80% of job value Vat is 12.5% and 20% of job value is service tax applicable. My question is what is better option which can apply and follow rules. My company deals with fabrication, erection and making of steel structures. please suggest me what I do?

AI Summary

Works contract tax allocation: verify classification and choose VAT/service tax apportionment with suitable composition scheme.
The dispute concerns apportioning contract value between VAT and service tax for steel fabrication and erection contracts, with two proposed splits. Advisers recommend verifying classification of output services, exploring exemptions, abatements and composition schemes, and running a cost-benefit analysis before electing a scheme. One advisor suggests composition schemes for both VAT and service tax; another describes a practical approach where VAT is charged on the larger apportioned value and service tax (plus applicable cess) on the service portion, noting accounting-implementation issues.