supply materials as well as labour for construction of new building fabrication work

[nandankumar roy]

dear sir,

what will be service tax calculation in case of billing made included  labour charges  as well as materials charges  on new factory construction and fabrication works

Regards,

nandan

[GANESAN E]

The service which is providing by you will falls under work contract services, for this you can go by two way one is by get register of works contract (COT) and by paying at 4% of total bill amount or get register under works contract (without COT) and tax will be charged at normal rate on 33.33% on total bill by getting 66.67% as abatement.

[YAGAY andSUN]

According to the amendment made in this budget the rate of tax would be 4.8% if you opt for composition scheme under Works Contract taxable service.

Further, according to the BSBK Judgment even divisble contract may be vivisected under Rule 2A.  Please do the cost benefit analysis before opting for any scheme under Works Contract.

[GANESAN E]

Yes, cost benefit analysis could be made before opting it.

AI Summary

Works contract taxation: elect composition or taxable-value with abatement; assess contract divisibility before choosing. Service tax for contracts supplying materials and labour in construction/fabrication can be met either by electing the works contract composition scheme with a fixed-rate levy on gross value, or by treating a portion of the contract value as taxable receipts with an allowed abatement reducing taxable value; precedent permits divisibility and vivisection of divisible contracts for valuation, so a cost-benefit analysis should guide the choice of regime.