TaxTMI 
TaxTMI 
Respected All, My query is that suppose if the service provider has only charged VAT in his bill and has not charged Sevice tax in the bill,the provider is a Individual and we are a company. Dose this trancation qulify for works contract?If it is a works contract than on what amount the service tax should be paid under reverse charge? the amount is Rs. 41 Lacs including Vat.
Service Tax on Works Contract
29 Nov 2012 
2 Replies 
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Reverse charge applicability for works contract services: recipient may owe tax on value net of VAT; composition option considered.
Question whether a transaction qualifies as a works contract where the supplier charged only VAT and not service tax. If the service is not in the negative list, omission of service tax indicates evasion and the recipient must pay tax under the reverse charge mechanism on the service portion, computed on the contract value net of VAT. Calculation options include applying a composition formula on the total contract value or segregating service and goods values pursuant to Rule 2A to determine the taxable base. (AI Summary)
Question whether a transaction qualifies as a works contract where the supplier charged only VAT and not service tax. If the service is not in the negative list, omission of service tax indicates evasion and the recipient must pay tax under the reverse charge mechanism on the service portion, computed on the contract value net of VAT. Calculation options include applying a composition formula on the total contract value or segregating service and goods values pursuant to Rule 2A to determine the taxable base. (AI Summary)