Our company is into industrial construction. We get mobilization advance before start of the project and material advance at a frequent interval.
Our client deducts WCT Tax on mobilization advance as well as on material advance. Wish to know whether he is correct on deducting WCT tax on payment basis ? I suppose it should be on the value of work done, without being adjusted for above advance.
Pl guide.
Dear Sir, Section 22 (4) of APVAT act talks of "Payment of TDS within prescribed time limit to the credit of state government" and Rule 17 (3)(i) relates to works contractor dealer who is under composition scheme. We are into regular scheme. The above section & rule doesn't says TDS to be done on payment basis (for dealer in regular scheme).
31 August 2012
Provisions relating to TDS : As per section 22 (4) of APVAT Act 2005 read with Rule 17(3)(i) and Rule 18, contractee (other than Government / local bodies) has to deduct the tax @ 4% of the amount paid or payable to the contractor at the time of each payment and remit such tax amount within 15 days of payment to the contractor.
Therefore whenever your client is making payment, TDS will have to be deducted. This is what the Act says. Therefore he is right.
Section 22 (4) of APVAT act talks of "Payment of TDS within prescribed time limit to the credit of state government" and Rule 17 (3)(i) relates to works contractor dealer who is under composition scheme.
We are into regular scheme. The above section & rule doesn't says TDS to be done on payment basis (for dealer in regular scheme).
CAclubindia
