abaitment under service tax on work contract

[RAM AVTAR]

whether notification no 1/2006 regarding abaitment 67% of material is available under work contract scheme if non composition scheme availed and material amount can not be specified.  if yes under which rule

[Sandeep Aggarwal]

The assessee can avail the abatement under Nofn.1/2006-ST if he doesn't opt for Compostion Scheme uner NN 32/2007.

It is to be noted that CS is not an alternative tax but an alternative method to compute tax laibility.

[rajkumar shukla]

In fact the abatement of 67% can be better termed as presumptive as where it is not possible to ascertain the value of material , recourse is taken to this notification. otherwise notification 12/2003-ST  is also available,subject to cetain conditions stipulated therein

AI Summary

Clarification on 67% Abatement for Work Contracts: Conditions Under Notification No. 1/2006 and Non-Composition Scheme Explained A query was raised regarding the availability of a 67% abatement on material costs under Notification No. 1/2006 for work contracts when the non-composition scheme is used, and the material amount cannot be specified. One response clarified that the abatement is available if the assessee does not opt for the Composition Scheme under Notification No. 32/2007, emphasizing that the Composition Scheme is an alternative method for computing tax liability. Another response noted that the 67% abatement is presumptive when material value cannot be determined, with Notification 12/2003-ST also being applicable under certain conditions.