rule 3 of service tax

[RAM AVTAR]

we are government contractor. our contract is composite.  contractee is deducting 2% tds on vat on gross value .  whether we have to pay service tax on after deducting tds of vat from total contract value or on gross value since rule 4 says that total taxable value should not be less than gross contract value

AI Summary

Contractor Questions Service Tax Calculation on Composite Contracts; Clarification: Tax Applies to Entire Value, Including TDS. A government contractor inquired about the calculation of service tax on a composite contract, questioning whether it should be applied to the gross contract value or after deducting TDS on VAT. One response clarified that service tax is payable on the entire contract value, including the amount received and TDS deducted. Another query was raised regarding the deductibility of sales tax paid on the project, noting that it was not separately charged in the contract.