Service tax on service portion in Works Contracts - Rationalization:

          • In Rule 2A of the Service Tax Valuation Rules, category ‘B’ and ‘C’ of works contracts proposed to be merged into one single category, with service portion as 70%; this change will come into effect from 1st October, 2014.

Service tax on works contracts: merger of valuation categories sets a uniform service portion, altering valuation and compliance. The amendment to Rule 2A of the Service Tax Valuation Rules merges categories B and C into a single category and fixes the service portion for works contracts valuation at 70%, effective 1 October 2014.