DEDUCTION LIMIT ON LABOUR BILL OF BUILDING CONSTRUCTION

[nandankumar roy]

DEAR SIR,

WE HAVE CONSRUCTED NEW BUILDING FOR MFG PURPOSE NOW TIME ARISE FOR SATTLEMENT OF FINAL PAYMENT . IF LABOUR BILL IS UNDER 8 LACS TURN OVER AS PARTY AGREED TO GIVE DECLARATION ON RS 10 STAMP PAPER  WHETHER SERVICE TAX WILL BE APPLICABLE OR NOT.IN CASE OF APPLICABLE WHAT WILL BE DEDUCTION PROCEDURE. PL CLARIFY.

[YAGAY andSUN]

If the amount of taxable service is below the  threshold limit ( i.e. Rs. 900000 for registration and Rs. 1000000 is for charging of tax), then no service tax will be chargable. An affidavit from the provider of the services in this matter will be sufficient. 

 

AI Summary

Service tax threshold: taxable labour bills below statutory registration and charging limits are not subject to service tax. Service tax is not chargeable on a labour bill when the taxable service value is below the registration threshold and below the threshold for charging tax. A sworn declaration from the provider on stamp paper is sufficient evidence to establish that the taxable value falls below the relevant threshold and that service tax need not be charged.