Service tax on Works contract-reg

[N Balachandran]

 

Sir,

When we execute the Turnkey contract ( EPC contract ) and the price for each activities are given seperately like; Design Engg, Supply, Erection and Civil works.   Can we opt the  payment of service tax under composition scheme only for Civil Works and remit the service tax @ 10.3% on Design Engg and Erection.?. 

My understanding is that, once the tax payable under composition scheme,  we have to pay @ 4.12% on the  Total value of the contract includes Design, supply , erection including civil works.  Civil works alone not eligibile for Composition scheme.  Is it correct?.

Pl clarify. 

N.Balachandran

AI Summary

Service Tax on Turnkey EPC Contracts: Composition Scheme Applies to Entire Contract at 4.12%, Not Just Civil Works A discussion on service tax applicability for works contracts, specifically turnkey EPC contracts, is presented. The query involves whether service tax can be paid under the composition scheme solely for civil works while applying a different rate for design, engineering, and erection. Responses clarify that the composition scheme applies to the entire contract, including all goods and services, at a rate of 4.12%, not just civil works. The discussion also touches on the convenience of the composition scheme and the non-exemption of bifurcated costs. There is a minor dispute over the correct tax rate, with most agreeing on 4.12%.