Civil work - How to charge Servic Tax & VAT

[Bhalchandra Ramdasi]

Respected Sir,

We have to invoice for Civil work which includes 62% of Material  and rest is Labour. How to charge both the taxes in single bill ?. State is Orissa.

1]Can we charge Service tax on 100% basic value and OVat on 62% material?

2]Or Service tax on 38% and OVat on 62%? Can we avail credit of Input service tax & Cenvat credits?

3]Or should we charge service tax on 40% & Ovat on 60%? Can we avail credit of Input service tax& Cenvat Credits?

Thanks,

 

AI Summary

Service tax valuation for works contracts clarified; VAT applies to material component and credit limited to service inputs.
Whether and how service tax and OVAT apply to a civil works invoice depends on allocation between labour/service and material components and valuation rules: VAT applies to the material component subject to standard deductions for labour, while service tax applies to the service portion either by deducting value of goods from gross contract price or by applying prescribed valuation methods for works contracts; input credit is available for input services and capital goods but not for inputs whose value is excluded from service valuation.