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Computation for vat on works contract

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Querist : Anonymous

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Querist : Anonymous (Querist)
30 August 2012 hi,

one of my client is in construction business and he opted composition tax under VAT, and it is works contract

so, how to compute VAT against payment received from customers.

if payment received Rs. 2 lakh...

whether i should pay tax Rs. 7692/- (200000/104*100*4%)

or

should i deduct 20% as exemption for labour in works contract i.e, should i discharge VAT on Rs. 1.80 lakh...?

kindly let me know as soon as early with relevant section & clause
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Ankit Varia

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Ankit Varia (Expert)
01 September 2012 The builder has an option to opt for with 1 percent composite tax in which no setoff is available or 5 percent composite tax

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