26 April 2011
rate of TDS in General WCT is 2% of Gross Work Done. and Tax is 12.5% of taxable Work Contract value (100% of WC value (-) 25% Labour component in civil work and 15% labour component in elect. work (-) actual but not more then 15% Hire charges (-) actual but not more then 5% water and elect. Charges (-) actual but not more then 2% POL charges = Taxable Work Contract Value) If Assessee adopted Composition Scheme then one can deduct 3% or 4% of Gross Work Done(Gross value of work executed during the tax period).
Tax liability = 12.5% of Taxable Work Contract Value (-) Input VAT (vat paid in pruchase bills) = if + pay the tax other wise claim refund or carry forward to next tax period
Please read following also.
Incidence and Levy of Tax
3. Works contract- 1. In case of turnover arising from the execution of the works contract, the amount representing the taxable turnover shall be the value at the time of transfer of property in goods (whether as goods or in some other form) involved in the execution of work contract and shall exclude - a. the charges towards labour, services and other like charges; and b. the charges towards cost of land, if any, in civil works contracts;subject to the dealers maintaining proper records such as invoice, voucher, challan or any other document evidencing payment of referred charges to the satisfaction of the Commissioner.
Explanation.- Civil works contracts for the purpose of this rule shall include construction of building or complexes - residential or commercial, bridges, flyovers, dams, barriers, canals, diversions and other works of similar nature.
2. a. labour charges for execution of works; b. charges for planning and architects fees; c. charges for obtaining on hire or otherwise machinery and tools used for the execution of the works contract; d. cost of consumables such as water, electricity, fuel, etc. used in the execution of the works contract the property in which is not transferred in the course of execution of a works contract; e. cost of establishment of the contractor including cost of marketing, finance expenses and securities deposits to the extent it is relatable to supply of labour and services; f. other similar expenses relatable to supply of labour and services; g. profits earned by the contractor to the extent it is relatable to supply of labour and services subject to furnishing of a profit and loss account of the works sites:
PROVIDED that where amount of charges towards labour, services and other like charges are not ascertainable from the books of accounts of the dealer, the amount of such charges shall be calculated at the percentages specified in the following table :-
TABLE
PERCENTAGES FOR WORKS CONTRACTS
Type of contract Labour, service and other like charges are percentage of total value of the contract 1 Fabrication and installation of plant and machinery. Twenty five percent
2 Fabrication and erection of structural works of iron and steel including fabrication, supply and erection of iron trusses, purloins and the like. Fifteen per cent
3 Fabrication and installation of cranes and hoists. Fifteen percent
4 Fabrication and installation of elevators (lifts) and escalators. Fifteen percent
5 Fabrication and installation of rolling shutters and collapsible gates. Fifteen percent
6 Civil works. Twenty five percent*
7 Installation of doors, doorframes, windows, frames and grills. Twenty percent
8 Supply and fixing of tiles, slabs, stones and sheets. Twenty percent
9 Supply and installation of air conditioners and air coolers. Fifteen percent
10 Supply and installation of air conditioning equipment including deep freezers, cold storage plants, humidification plants and de-humidors. Fifteen percent
11 Supply and fitting of electrical goods, supply and installation of electrical equipments including transformers. Fifteen percent
12 Supply and fixing of furniture and fixtures, partitions including contracts for interior decoration and false ceiling. Twenty percent
13 Construction of Railway coaches and wagons on under carriages supplied by Railway. Twenty percent
14 Construction or mounting of bodies of motor vehicle and construction of trailers. Twenty percent
15 Sanitary fitting for plumbing and drainage or sewerage. Twenty five percent
16 Laying underground surface pipelines, cables or conduits. Thirty percent
17 Dyeing and printing of textiles. Thirty percent
18 Supply and erection of weighing machines and weighbridges. Fifteen percent
19 Painting, polishing and white washing. Thirty percent
20 All other contracts not specified from Sl. No. 1 to 19 above. Twenty percent
*Twenty five percent of total value of the contract excluding the cost of land transferred, if any.
3. a. In the case of works contract of civil nature where the payment of charges towards the cost of land, if any, is not ascertainable from the books of accounts of the dealer, the amount of such charges shall be calculated @ 30% of the total value of the contract except in the case of construction of commercial buildings or complexes where it shall be calculated @ 50% of the total value of the contract. b. In the case of works contract of civil nature where only a part of the total constructed area is being transferred, the charges towards the cost of land shall be calculated on a pro-rata basis by the following formula:-
Proportionate super area X Indexed cost of acquisition of land
Total plot area X Floor Area Ratio
Explanation.- Proportionate super area for the purpose of this clause means the covered area booked for transfer and the proportionate common constructed area attributable to it.
In the case of work contract of civil nature where only a part of total constructed area is being transferred, the deduction towards labour, services and other like charges mentioned in sub-rule (1) shall be calculated on a pro-rata basis.
4. In the case of works contract of civil nature, the tax shall be payable by the contractor during the tax period in which the property in goods is transferred.
Explanation 1.- For the purpose of this rule, indexed cost of acquisition shall be calculated as per section 48 of the Income Tax Act, 1961.
Explanation 2.- No tax shall be payable by a contractor on the amount representing the value of the goods supplied by the contractee to the contractor in the execution of works contract in which the ownership of such goods remains with the contractee under the terms of the contract and the amount representing the value of the goods supplied by the contractee to the contractor does not form part of the contract and is not deductible from the amount payable to the contractor by the contractee for the execution of the works contract.
4. When turnover arises in a tax period For the purposes of sub-section (4) of section 12, the amount of turnover or turnover of purchases arising in the tax period in the case of a sale or purchase occurring a. by means of an installment sale or hire purchase of goods made in the tax period, is the total amount of the sale price that will be due and payable under the agreement, including the amount of any option fee paid or that may be payable; b. by the transfer of a right to use goods, not being a hire purchase agreement or installment sale agreement, is the proportion of the sale price that is due and payable during the relevant tax period; c. by means of transfer of property in goods (whether as goods or in some other form) under a works contract executed or under execution in the tax period, is the consideration received or receivable by the dealer for such transfer of property in goods (whether as goods or in some other form) during the relevant tax period.
4A Determination of taxable turnover of sales of residential hotels charging a composite sum for lodging and boarding
While determining the turnover of sales of goods, specified in sub-clause (vii) of clause (zc) of section 2, of the residential hotels providing lodging and boarding and charging a composite sum, which is inclusive of breakfast or lunch or dinner or, as the case may be, a combination of all or any of the above, the taxable turnover of sales in respect of any period shall be computed in the following manner, namely:- (a) Where the composite charges include the charges for breakfast. Five per cent of the composite charges.
(b) Where the composite charges include the charges for lunch. Ten per cent of the composite charges.
(c) Where the composite charges include the charges for dinner. Fifteen per cent of the composite charges.
(d) Where the composite charges include the charges for breakfast and lunch Fifteen per cent of the composite charges.
(e) Where the composite charges include the charges for breakfast and dinner. Twenty per cent of the composite charges.
(f) Where the composite charges include the charges for lunch and dinner. Twenty Five per cent of the composite charges.
(g) Where the composite charges include the charges for breakfast, lunch and dinner. Thirty per cent of the composite charges.
PROVIDED that if the claimant dealer has in his possession sufficient documentary evidence, which conclusively proves that the component of the taxable turnover of sales in the composite sum is less than the percentage given above, the taxable turnover shall be reduced from the above percentage to the extent of actual sum of turnover of sales.
5. Composition Scheme 1. A dealer making an application for registration under section 19 and opting for payment of tax under sub-section (1) of section 16, shall specify his intention to pay tax under section 16. 2. A dealer paying tax at the rates specified in section 4 may elect to pay tax under section 16 only from the beginning of the following year by making an application in Form DVAT-01 within 30 days from the first day of the beginning of the following year. 3. A person who is eligible under sub-section (3) of section 16 and elects to pay tax under sub-section (1) of section 16 shall, on or before 25th July of the year of the commencement of the Act, file an application in Form DVAT-02, specifying his intention to pay tax under section 16 and give particulars of trading stock, raw material, packaging material and finished goods held on the date of commencement of the Act and on which he is liable to pay tax under sub-section (6) of section 16. 4. If a dealer, who has elected to pay tax under sub-section (1) of section 16, desires to reverse his option under sub-section (2) of section 16, he shall file an application in Form DVAT-03 within 30 days from the first day of the beginning of the following year. 5. A dealer who is covered by sub-section (10) of section 16 shall give intimation to the Commissioner in Form DVAT 03 A. 5A Registration, furnishing of security, payment of tax and assessment of casual trader a. A casual trader shall, at least three days before commencing his business in Delhi, make an application in Form DVAT-4A in person or through his authorised agent to the Commissioner. b. The Commissioner shall, after registration is granted, issue him a registration certificate in Form DVAT-6A along with as many Forms DVAT-34 and DVAT 35 as are reasonably required, against payment of the price thereof, if any. c. Every casual trader shall furnish a return in Form DVAT-16A which shall be accompanied with the proof of payment of tax and unused Forms DVAT-34 and DVAT 35, if any.
Chapter III
Tax Credit
6. Apportionment of tax credit Where a dealer has purchased goods intended to be used for the purposes specified in sub-section (1) of section 9 and the goods are subsequently used fully or partly for other purposes as specified in sub-section (4) of section 9 or the goods or goods manufactured out of such goods are exported from Delhi by way of transfer, the tax credit claimed shall be reduced under section 10, in the following manner:- i. in case commodity-wise accounts are maintained by the dealer clearly correlating use of goods for making sales under sub-section (1) of section 9 and for other purposes, the tax credit shall be reduced by the amount of input tax paid on the purchases used for such other purposes. ii. in case commodity-wise accounts are maintained by the dealer clearly correlating use of goods for making sales referred in sub-section (1) of section 9 and for transfer of goods or goods manufactured out of such goods, the tax credit shall be reduced in the manner specified in rule 7. iii. in case commodity-wise accounts are not maintained by the dealer clearly correlating use of goods for making sales referred to in clause (i) above, the reduction of tax credit shall be calculated on the basis of the purchase price of such goods immediately preceding their use for other purposes or their fair market value, whichever is higher. iv. in case commodity-wise accounts are not maintained by the dealer clearly correlating use of goods for making sales referred to in clause (ii) above, the reduction of tax credit shall be calculated on the basis of the purchase price of such goods immediately preceding to their transfer or their fair market value, whichever is higher, and the input tax credit shall be reduced in the manner specified in rule 7.
7. Reduction of tax credit 1. For the purposes of sub-section (6) of section 9 and sub-section (3) of section 10, the tax credit shall be reduced by the following prescribed percentages:-
(a) in the case of goods specified in the Second Schedule 100 percent
(b) in the case of goods specified in the Third Schedule 100 percent
(c) in the case of goods specified in the Fourth Schedule 20 percent
(d) in the case of any other goods specified in clause (e) of sub-section (1) of section 4 32 percent.
2. Where a dealer has transferred any goods in the circumstances specified under sub-section (6) of section 9 and has made a reduction of tax credit by the prescribed percentage, he shall be entitled to claim the tax credit so reduced when he brings such goods back into Delhi for sale on which tax is payable under section 3 or for sale in the course of inter-State trade or commerce or for sale outside Delhi or for sale in the course of exports out of the territory of India, subject to the condition that the goods brought back to Delhi are the same goods as originally transferred [6][or the goods processed or manufactured out of the goods as originally transferred.] 3. Where any goods or goods manufactured out of such goods are lost or destroyed, the dealer shall not be eligible to claim tax credit on such goods and the credit taken in any earlier tax period shall be reversed in the tax period in which goods are claimed to have been lost or destroyed. 4. For the purpose of sub-section (9) of section 9, the prescribed percentage of reduction of tax credit shall be 4 percent.
7A. Adjustment to tax any interest amount due and outstanding; sale price of any exempt goods; sale price of goods taxable at the rate of 1 percent; sale price of goods taxable at the rate of 4 percent; sale price of goods taxable at the rate of 12.5 percent; and sale price of goods taxable at the rate of 20 percent
PROVIDED FURTHER that where the price so written off is recovered subsequently either in whole or part, it shall be deemed to be the sale of goods by him in the tax period in which such price is recovered and the dealer shall make an adjustment in calculating the tax payable for the same tax period by allocating the recovered amount to the amounts stated above in the reverse order.
7B. Adjustment of tax due to retrospective reduction of tax liability by virtue of the Delhi Value Added Tax (Second Amendment) Act, 2005
A dealer, in consequence of the retrospective operation of
a. the reduced rates of tax on the turnover pertaining to declared goods involved in the execution of works contracts and the works contracts which are in the nature of printing works in accordance with the provisions of section 4; or b. the eligibility to claim input tax credit on purchase of second hand goods from the resident seller under sub-section (2) of section 15; or c. the discharge of tax liability on works contracts in accordance with the provisions of sub-section (4) of section 105,
shall re-compute his tax liability and shall make adjustments on account of excess amount of tax deposited under the Act, if any, in the first return which is due to be filed after the date of notification of the Delhi Value Added Tax (Fifth Amendment) Rules, 2005:
PROVIDED that the dealer shall not make the adjustments of the excess amount of tax deposited unless such excess amount has been refunded to the purchaser:
PROVIDED FURTHER that the dealer shall submit the proof of the amount so refunded to the purchaser along with his return mentioned above.
8. Treatment of stock brought forward during transition
For the purposes of sub-section (2) of section 14, the amount of tax borne shall be a. where the dealer holds an invoice issued by a dealer registered under the Delhi Sales Tax Act, 1975 (43 of 1975) in respect of the opening stock which separately states the amount of tax paid under the Delhi Sales Tax Act, 1975 (43 of 1975) at the point specified under section 5 of the said Act, the amount of such tax as is allocable to the opening stock; or b. in any other case, an amount calculated according to the formula-
F x P x 75%
where
F = the tax fraction, (r/r+100) [where r is the rate of tax under the Delhi Sales Tax Act, 1975 (43 of 1975) applicable as on March 31, 2005 to the opening stock].
P = the price paid for the opening stock.
9. Credit on second hand goods purchased by a registered dealer from a resident seller not registered under the Act 1. No input tax credit shall be claimed on second hand goods purchased by a registered dealer from a resident seller who is not registered under the Act, unless the registered dealer has in his possession adequate proof of the amount paid for such goods in the form of an invoice or receipt signed by such a resident seller containing the following, namely - a. the description of the goods; b. the amount paid for the goods; c. the name and address of the resident seller; and d. the Permanent Account Number (PAN), if any, of the resident seller.
2. No input tax credit shall be claimed under section 15 by a registered dealer on purchase of second hand goods unless the dealer has in his possession original invoice or cash memo issued under the Act or under the Delhi Sales Tax Act, 1975 (43 of 1975) (since repealed) for purchase of said goods in Delhi by the resident seller.
10. Document for availing of credit 1. A dealer requiring to furnish statement of trading stock and raw material under clause (c) of sub-section (1) of Section 20 shall furnish the same in Form DVAT 19 within 7 days of his registration taking effect. 2. No input tax credit shall be allowed on the trading stock or raw materials held by a dealer who is registered or re-registered at the time when such registration or re-registration takes effect, unless the dealer has in his possession adequate proof of the amount of input tax paid in the form of a tax invoices issued by a registered dealer to the dealer claiming the tax credit.
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