06 October 2010
We have given contract with marterial and labour to a contractor. The person not register with VAT, No service tax registration, not supply saperate bill of material and saperate bill of labour charges. He submitt consolidiate bill with material. He is UDR contractor. Please advice us regarding the following questions. 1) Can we liable to pay VAT. 2) Can we liable to deduct TDS under VAT Act. 3) Can we deduct to TDS under Income Tax Act. 4) This contract is cover under WCT Act or not. 5) If it is cover under WCT what rate of Tax is applicable.
07 October 2010
1. VAT is applicable only in the case of sale of goods. In the given case, it is composite contract (i.e. labour with material). You are no concern with VAT.
2. The contractor is liable to charge service tax if exceeding the turnover of Rs. 10 Lac in a Financial Year.
3. You are liable to deduct the tax u/s 194C.
4. TDS under VAT is not attracted. Please clarify further with experts, since it may depends on the commodity transacted.
5. WCT is applicable in selected state only, normally it is applicable on exceeding the ceiling prescribed under relevant legislation. The liablity of charging WCT is again on the contractor, if applicable.
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