Set off on vat

This query is : Resolved

dhananjay (Querist)
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06 April 2012 Dear Team,

Request you to kindly help me with fallowing case.

I am currently working on construction project where composite VAT is applicable at 5% and Service Tax is applicable at 4.12%.

Now contractor purchase a Concrete @ 12.5% VAT.( which forms a raw material for building )

Now when it comes to the payment , I am liable on which of the following case.

1. 12.5% basic VAT + 5% composite VAT or
2. 7.5 % ( Difference of 12.5 % and 5% ) + 5% composite VAT.

Please help.

Regards,

Dhananjay B. Mande

CA Nikhil Jhanwar

CA Nikhil Jhanwar (Expert)
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06 April 2012 I understand your want to ask about the liability of VAT I think Since your are using composite rate then simply there is a liability of 5% irrespective of VAT applicable on raw materials