Determination of CST work contract price

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

21 February 2010 A Dealer registered in Maharashtra(Mumbai) is doing works contract(interior designer) at Gujarat(Baroda) in the year 2008-09 for Rs. 40 lacs. Also the same dealer for same work gives sub-contract(Purchase) of Rs.30 lacs to some other dealer registered at Gujarat(Baroda).

Q.1 On what price a dealer registered in maharashtra shall levy CST on Rs.40 lacs or Rs.10 lacs after deducting the sub-contract price from the contract price ?

Q.2 Whether standard deduction of 25% as per notification no STR. 1506/CR-38/Taxatin dt 8-9-2006 is applicable on 10 lacs(i.e after deducting sub-contract value) or on the whole contract value of Rs. 40 lacs ?

Q.3 Is he eligible to do composition and levy CST @ 8% instead of 12% ?

M Prabhakar Menon

M Prabhakar Menon (Expert)
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21 February 2010 Sales Tax (now Vat) is a State levy CST is applicable for inter state sales U are confused. The Vat returns and related matters applicable will be as is in Gujarat in what way is Maharashtra involved ? To the extent purchase/sales take place in Maharashtra only Maharashtra VAT/CST will apply.In a works contract the place of executing the work determines the levy applicable.