Works Contract Service was introduced w.e.f dtd 1.6.2007 vide Notification No 23/2007. At first, rate of Service Tax was 2%. Later on it was increased to 4%. After dtd 1.7.2012, the collection on the value of Service Tax has been changed which is detailed below:-
A. In original Contracts, service Tax is leviable on 40% of the value of the Service.
B. In repairing & maintenance of goods, service Tax is leviable on 70% of the value of the Service.
C. In contracts other than A & B, all other works contract Services like finishing jobs, glazing, tiling and finishing jobs including repairing & maintenance service, service tax is leviable on the 60% of the value of goods.
It may be noted that B is for repairing of goods.
Last not the least, what is the ingredient of works contract service?
The simple answer is that in works contract, transfer of property is involved and such goods is leviable to sales tax.
A. In original Contracts, service Tax is leviable on 40% of the value of the Service.
B. In repairing & maintenance of goods, service Tax is leviable on 70% of the value of the Service.
C. In contracts other than A & B, all other works contract Services like finishing jobs, glazing, tiling and finishing jobs including repairing & maintenance service, service tax is leviable on the 60% of the value of goods.
It may be noted that B is for repairing of goods.
Last not the least, what is the ingredient of works contract service?
The simple answer is that in works contract, transfer of property is involved and such goods is leviable to sales tax.
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