TMI BlogContractee’s responsibility under reverse charge (work contracts) as per amendments of Budget FY.12-13X X X X Extracts X X X X X X X X Extracts X X X X ..... Dear Sir, We as a contractee going to finalized works contract for FY-12-13. What would be our responsibility under reverse charge as a contractee? Is any other change in service tax under the budget of FY-12-13 which should be kept in mind as a contractee? Thanks Jai - Reply By Rajesh Sharma - The Reply = Dear Jai, As per the budget amendments to be effective f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rom notified date service tax needs to be paid by both service provider and service recipient in certain cases if the service provider is Proprietary/PF/LLP/AOP and receiver is company: o Renting or hiring of motor vehicles- (to the extent of 60% by receiver and balance by provider in case of abatement otherwise 100% by receiver.) o Manpower Supply - (to the extent of 75% by receiver and balance ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by provider.) o Works Contract - (to the extent of 50% each. - Reply By umesh kumar - The Reply = Dear sir, Thanks a lot your valuable guidance I want share more on this Suppose contract value is Rs.1, 00,000 (Value of Material labour) Assumed, Material value as per VAT act 75% Rs.75, 000 Assumed Service Tax portion 25% i.e. Rs.25, 000 Service Tax will be as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... per New Rate will be @12.36% on Rs.25,000 comes Rs.3,090 Now this Rs. 3,090 50% i.e. Rs. 1545 will be responsibility of contractee have to be deposited by the contractee. Please suggest I am going on right track or any other understanding is possible. - Reply By Rajesh Sharma - The Reply = Dear Jai, You need to understand the whole concept of providing the % scheme as part of va ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... luation rules. The provisions as provided in the notification prescribed that in a works contract the value of service needs to be arrived based on documents and books of accounts. However, in case the same cannot be arrived than value for service tax needs to be arrived at as per the % given in the each scenario. In the example given by you the service tax would be as follow; Value of contrac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t including material - Rs. 100,000/- Service tax @4.8% (40% of contract value) 4800/- Edu Cess@2% 96/- SHE Cess @1% 48/- Now in case the service is received from Proprietary/PF/LLP/AOP and service receiver is a Co. than service tax liability would be discharged in the proportio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n of 50% each - Contractee’s responsibility under reverse charge (work contracts) as per amendments of Budget FY.12-13 - Query Started By: - umesh kumar Dated:- 5-4-2012 Service Tax - Got 3 Replies - Service Tax - Discussion Forum - Knowledge Sharing, reply post by an expert, personal opinion Tax Management India - taxmanagementindia - taxmanagement - taxmanagementindia.com - TMI - TaxTMI ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... - TMITax ..... X X X X Extracts X X X X X X X X Extracts X X X X
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