Indore : The Government contractors will have to shell out heavy service tax with effect from April 1, 2015 as per the new budget provisions. However, work on dam, canals and pipelines will be exempted from such tax. Tax Practitioners Association Indore and Indore Chartered Accountant Chapter jointly organized a seminar on Union Budget 2015-16.
In his address, key-note speaker Sunil Jain said that the government contractors would have to shell out heavy service tax with effect from April 1, 2015 as per new budget provisions. However, work on dam, canals and pipelines will be exempted from such tax.
He said that other constructions as defined in the provisions and repairs carried out to government, municipalities owned properties such as hospital, schools and housing units for poor are also exempted from this tax.
Jain said that contractors whose work orders are prior to April 1, 2015 would face more problems as they would have to pay tax from their pocket. Similarly services where the rate was increased from 12.36% to 14% will have the same problem if billing was dated before April 1, 2015 and payment was made after that date.
Jain concluded by saying that the provision of paying Rs 2500 and obtaining the relevant tax information from the government is a laudable step.
