Composition Scheme in VAT

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Devendra (Querist)
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12 May 2010 What is Composition Scheme in VAT? Who is eligible to apply to such scheme? And is there any benefits of such scheme?

CMA Ramesh Krishnan

CMA Ramesh Krishnan (Expert)
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12 May 2010 Under VAT - Works contract which is combined contract of Supply of material and labour which is difficult to segrgate the billing as material and labour separatly. in that senario the dealar can opt the composition scheme. Under composition scheme he can pay VAT on the total contract value with some concessional percentage of VAT rate.Some cases it is useful tax savings

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Devendra

Devendra (Querist)
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12 May 2010 Is it that the dealer has to pay the tax @ 8% on difference between Sales and purchase?

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CMA Ramesh Krishnan

CMA Ramesh Krishnan (Expert)
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12 May 2010 It is state specific. But generally under composition scheme. We need to pay tax on billing value.