Taxability in case of works contract and under service tax.

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....axability in case of works contract and under service tax.<br> Query (Issue) Started By: - LAXMIKANT ARORA Dated:- 5-5-2014 Last Reply Date:- 2-1-2016 VAT + CST<br>Got 1 Reply<br>VAT / Sales Tax<br>This is with reference to your queries regarding taxability of the works contract. We hereby inform you that the fabrication services of readymade garments with , without or even part materials supplie....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....d by the exporters/ main manufacturers are not exempt under service tax and works contract tax (WCT). The following are the cases of the fabrication services of readymade garments, provided to the exporter/main manufacturer :- * If all the input materials are supplied by the exporter/main manufacturer and only services are provided to the exporter/main manufacturer, then only service tax shall ....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....be applicable at the rate of 12.36 percent * If no material is provided by the exporter/main manufacturer i.e. it is the case of contract given then only VAT is applicable at the rate of 12.5 percent on supply of readymade garments. * If cloth is provided by the exporter/main manufacturer and other input materials are provided by the works contractee. In this case works contact tax and servic....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....e tax both shall be applicable with the following rates:- * Works Contact Tax (wct) at the rate of 6.25 percent and * Service tax at the rate of 7.416 percent This means that total tax shall be 13.666 percent of the sales. In context of your other query regarding construction contracts of civil works* the following are the cases :- ( * CIVIL WORKS Contracts shall include construction of bu....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....ilding or complexes - residential or commercial, bridges, flyovers, dams, barriers, canals, diversions, other works of similar nature and the collaboration agreements or joint development agreements or similar other arrangements between land owner and contractor/ builder by whatever name called for construction of complex or property.) * If all the materials are supplied to the contractor , then....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

.... only service tax shall be applicable at the rate of 12.36 percent * If materials are supplied by the contractor , then the wct rate shall be 12.5*75 percent = 9.375 percent of the total value of contract excluding the cost of land transferred (if any) and service tax rate shall be 12.36*25 percent = 3.09 percent * If it is the case of collaboration agreement, the value of contract shall be ac....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....tual value of construction including profit which is transferred by the contractor to the land owner and the tax rates of service tax and wct shall be 3.09 percent and 9.375 percent respectively on the value of contract. Have a look friends and revert in case of any mistake. Reply By MARIAPPAN GOVINDARAJAN: The Reply: Whether you have got clarified in the above issue? If not please inform.<br>....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

.... Discussion Forum - Knowledge Sharing ....