Work contract in a inter-state. CST or VAT

This query is : Resolved

Pankaj Chandani (Querist)
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15 June 2009 If I undertake a work contract of a turnkey project of Interior Furnishing of office in Chandigarh and My office is in UP, what all taxes do I have to charge and what taxes will my material suppliers charge me in CHandigarh. Will CST or VAT be applicable?

I am planning to purchase some material from Chandigarh and some from UP.

For material purchased in Chandigarh, the material will be supplied to the site in chandigarh. Will I have to pay CST?

Bindu Madhav

Bindu Madhav (Expert)
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15 June 2009 Inter-State Works Contract will be covered under CST only. In your case along with CST, service tax also may apply (depending on your taxable turnover etc.,)

With regard to purchases within Chandigarh, I think VAT(Chandigarh) only will apply. The basic condition for applicability of CST is 'Movement of Goods to Outside the State" which is not happening in your case. Also may note that in case of State of AP Vs NTPC, SC has ruled that for CST, sale should not be compete within the state.

Amit Bajaj

Amit Bajaj (Expert)
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18 September 2011 Can also refer to below article for understanding the applicability of VAT or CST in inter-state works contract

http://blog.amitbajajadvocate.com/2011/09/understanding-applicability-of-vat-or.html

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