Works Contract Service

[Amit Jadhav]

I am working with one of the pvt. sugar mill. if we are receiving works contract service then the liabillity to pay 50% service tax is on us. i want to know .....

1) if the party is not having the service tax registration then what is the proceedure to pay the service tax.

2) if the material value & service value is not determinable then what is the proceedure for service tax payment.

 

[YAGAY andSUN]

If the service provider is Individual, LLp, HUF or Association of persons then under Partial Reverse charge  Mechanism, you are liable to pay the tax.  If the service provider has not crossed the threshold limit, even then, you are liable to pay 50%.

If the material value and service value is not determinable then you may pay either 4.8% plus cess or 12.36% on the 40% of the contract value.

AI Summary

Partial reverse charge liability for works contract services requires recipient to pay tax where provider unregistered; alternative valuation methods allowed. Liability to discharge service tax for works contract services rests with the recipient under the Partial Reverse Charge Mechanism when the provider is an individual, LLP, HUF, association of persons, unregistered, or below the threshold; the recipient must pay fifty percent of the tax. If material and service values cannot be determined, the recipient may compute the taxable service element using either the lower composite rate with cess or a valuation method that treats a specified proportion of the contract value as taxable and pay tax on that basis.