wct computation & payment method in ANDHRAPRADESH

This query is : Resolved

Mr. Priyanka Jena (Querist)
Follow

17 September 2008 SOME VENDORS DOING ELECTRICAL WORK FOR OUR CO. THIS INVOLVED N=BOTH MATERIAL & SERVICE.THEY ARE CHARGING 4%WCT ON THEIR BILL.

FOR EXAMPLE

Invoice gross amt 100

wct (4% on 100) 4

service tax (12.36%*33%)4.12

total 108.12

Now tell me whether we've to deduct the wct amt or not?if yes what should be the wct deduction amt.what is the procedure in payment?what forms are available .

If no tell me who paid the wct amt to govt?

CA. O.P. Agarwalla

CA. O.P. Agarwalla (Expert)
Follow

18 September 2008 Scetion 22(4) of APVAT Act says about deduction @ 2% of the amount payable to Contractor. Though it is logical that no TDS should be deducted on service tax, it is advisable to obtain a claification from the appropriate authority in this regard. However, it will be safe to deduct2% on Rs. 108.12.

In case of a VAT dealer executing works contract for a company
or a statutory body or an undertaking or an institution other than
Government or local authority irrespective of the quantum of value
of the contract or for any other dealer or a firm where the value of
the contract exceeds Rs.10,00,000/- (Rupees ten lakhs only), a
tax at the rate of 2% shall be deducted from the amount payable
to him and such contractee deducting tax at source shall remit
such amount in the manner as may be prescribed

Message likes : 1 times