Issue of Service Tax & Vat

[Asked by Guest]

Dear Sir

Kindly advice for service tax & vat

We are Govt Contractor (eligible for Advertising & Construction work)

Kindly advice for bifruction of service tax & vat

How much we have to charge vat & service tax on single bill(Service & Material both used in 1 Bill)

[YAGAY and SUN]

DVAT @ 12.50% on the 75% value of the Contract will be charged if you don't maintain the separate acconts for labour and Material.

Service tax will be paid @ 4.80% on the Gross value of the contract , if you are body corporate, otherwise provisions of reverse charge mechanism will be applicable.

There are two more methods under which you can calculate the liability of service tax i.e. on the 40% of the value of the contract you may pay service tax @ 12.36% or under Rule 2(A) bifurcate the value of goods and pay the service tax on remaining amount.

AI Summary

Tax allocation for mixed supply: VAT and service tax apportionment requires account separation or alternative valuation and reverse charge.
Where a single invoice mixes materials and services without separate accounts, VAT applies on a prescribed proportion of the contract value; service tax is payable on the gross value if the recipient is a body corporate, otherwise the reverse charge mechanism may apply. Alternative methods permit taxation on a stated proportion of contract value or bifurcating goods and services value so service tax is charged on the residual service portion.