service tax on contract of excavation of stone crusher unit

The service tax is levied on the contract of excavation of stone crusher unit.Service tax is levied on the contract of excavation of stone crusher unit at 5%.The rate of service tax is as under:

If the value of goods or services supplied exceeds Rs. 50 lakh,then the service tax shall be charged at 12.5%
If the value of goods or services supplied does not exceed Rs. 50 lakh,then the service tax shall be charged at 5%.

The Service Tax

The service tax is a value-added tax (VAT) imposed on services rendered by an individual or a registered firm. The service tax rate is currently 18%.
The main services that are liable to service tax are:

1. Services of installation, erection, repair, alteration and maintenance of machinery and equipment used in the business of manufacturing or extracting minerals.
2. Services of management of mineral resources including exploration, mining, quarrying and processing of minerals.
3. Services of trade, business or professional services which are connected with the business of manufacturing or extracting minerals.

How the Service Tax is Calculated

The service tax is levied on the contract of excavation of stone crusher unit at the rate of 12%. The calculation of the service tax is as follows:

Service Tax on Contract of Excavation of Stone Crusher Unit = (Base Price x Service Tax Rate)

For example, if the base price of a stone crusher unit is Rs. 100,000 and the service tax rate is 12%, then the service tax payable on the contract would be Rs. 120,000.

Who Is Eligible for the Service Tax?

If you are a contractor who contracts for the excavation of a stone crusher unit, then you are eligible for the service tax. You must furnish details of the contract to the assessee office.

What Are the Benefits of Using a Contractor?

If you have decided to use a contractor for your excavation project, there are many benefits to consider. Here are just a few:

1. Increased Efficiency – Using a contractor will increase your efficiency because they have years of experience working on similar projects. They will know how to get the job done as quickly as possible without sacrificing quality.

2. Reduced Costs – A contractor can help reduce costs by doing the job faster and cheaper than you could do it yourself. Plus, they will be familiar with all of the regulations related to excavation, which can save you time and money.

3. Increased Safety – A contractor will ensure that your project is conducted in a safe and professional manner. They will use heavy equipment and precautions to avoid injuries to both you and the workers.

4. Greater Flexibility – A contractor is able to work with your schedule more easily than you could do on your own. This can allow you to get the job done faster and more effectively.

Service tax on contract of excavation of stone crusher unit

The service tax is a central levy imposed by the Indian government on services. The service tax applies to all services, except those specifically exempted under the provision of the Income Tax Act, 1961. The tax is levied at the rate of 12%.

The main purpose of imposing service tax is to generate extra resources for the government and to reduce the fiscal deficit. The levy also aims at reducing poverty and increasing revenue generation capacities of the government.

Contracts of excavation relating to stone crushers are liable to service tax. The taxation treatment of such contracts will depend on the nature of work done in conducting such contract. Contractors engaged in general construction activity, including excavation, would not be liable to pay Service Tax on such contracts as their work does not fall within the ambit of service activities covered under section 2(17) of the IT Act. However, contractors engaged in stone crusher contracting would be liable for Service Tax on such contracts as their work falls within the ambit of service activities covered under section 2(17) of the IT Act.

Conclusion

Contract of excavation of stone crusher unit is liable to service tax. Service tax at the rate of 15% will be levied on the contract value subject to exemption as per section 80C of the Income-tax Act 1961.