Is Labour charges taxable under service tax?

Is Labour charges taxable under service tax?

Note: A works contract involves a composite supply of goods and services. Under service tax rules, the tax was paid at 15% to the extent of 40% of the total contract value….Comparison of after-tax labour charges.

Particulars	Pre-GST	Post-GST
Total cost (material +labour) (A)	100	100
Excise at 12.5% (B)	12.5	—

Is VAT charged on work contract?

TREATMENT OF WORKS CONTRACTS Page 2 01 ARE WORKS CONTRACTS LIABLE TO TAX UNDER AP VAT ACT, 2005? Yes. The value of sale of goods used in the execution of works contract is liable to tax. The liability however arises if the contractor is registered or is liable to be registered under APVAT Act, 2005.

What is the GST rate for Works contract?

18%
For Contractors For The Works Mentioned In Item (vii) GST Rate Has Increased From 5% To 18% For Providing Services To Governmental Authority/Govt Entity .

How is tax calculated on contract work?

As Contract Employees are not treated as normal employees, there Income is taxed as Income from Business/Profession and such employees are also required to maintain a record of all their expenses and maintain their Profit & Loss A/c and Balance Sheet. He can simply disclose his Income as 50% of the amount received.

Is service tax applicable on job work?

As per Section 66D(f) of the Finance Act, 1994 any process amounting to manufacture or production of goods is not taxable service. As per the said Notification, job work in relation of any goods on which appropriate duty is payable by the principal manufacturer, is exempted.

Is service tax applicable to contractor?

A works contract is one under which there is a transfer of goods as part of a service contract. Therefore, service tax is paid at 15% (prevailing rate as of August 2016) on 40% of the total contract or 70% of the service portion by the contractor and the recipient of the service equally.

How is service tax and VAT calculated on works contract?

Service tax is payable at composite rate on: 40% of the value of the original work (original work will include all types of new construction, alteration or additions made to damaged structures) 70% of the value in case of maintenance work. 70% in case of all other works contract.

Is GST applicable on works contract?

As per Para 6 (a) of Schedule II to the CGST Act, 2017, works contracts as defined in section 2(119) of the CGST Act, 2017 shall be treated as a supply of services. Thus, there is a clear demarcation of a works contract as a supply of service under GST.

Is service tax applicable on PWD contractor?

If the contractor is engaged in road works of public use then no need to pay service tax.

Is contract of service taxable?

AS a Contract of Service earning 21,000 monthly, we are withheld a tax of 13%. In this example your effective tax rate is 6.33% and this includes income and business taxes. The government agency should deduct only 5% withholding and you pay the difference of 1.33% when filing your income tax return.

What is negative list under service tax?

Negative List of Service Tax: Under Section 66D of the Finance Act 1994, a negative list of services have been outlined, which are deemed to be exempt from service tax. Any service provided that does not come under the purview of this list is liable to be levied with service tax.

What are job work charges?

The term Job-work itself explains the meaning. It is processing of goods supplied by the principal. The concept of job work already exists in Central Excise, wherein a principal manufacturer can send inputs or semi- finished goods to a job worker for further processing.

What is service tax on works contract?

Earlier, service tax works contract is restricted to construction related activities, but now all kinds of works contract activity is liable to be taxed under Service Tax. Works contract is also included in the “Declared Service” under section 66E, which states as under “The following shall constitute declared services, namely ………

When a work contract is declared as service?

Work contract is declared Service:- Section 66E of Finance Act, 1994, provided clarity in respect of few services, which shall be considered as service and hence liable to charge service tax unless they are exempted anywhere else in service tax law.

What is the% service tax a contractor charges in Bill?

The contractor charges 3 % service tax in bill. Reply Harbinder Singh Kalsisays February 11, 2017 at 2:25 pm I am the Electrical contractor doing various contract to CPWD as well as to private builder. Are we exempted for the Govt dept or not then what is the % on which we have to pay service tax on Govt and Private builder Reply

What is the value of work contract service [rule 2a (i) ]?

Value of work contract service [Rule 2A(i)] Value of works contract service = Gross amount charged for the works contract less Value of property in goods transferred in execution of the said works contract. Gross amount charges: It does not include VAT or sales tax.