Inter state sales and tds under vat laws
This query is : Resolved
01 December 2012
A dealer in Karnataka has supplied materials and undertaken erection, installation of the materials in Goa. There are separate contracts for supply of materials and installation.
The dealer in Goa has deducted tax under the the local VAT laws.
Please inform
a. is WC TDS applicable on interstate sales.
b. was the dealer in Karnataka required to register in the state of goa
c. manner of seeking refund of the TDS as the Karnataka dealer is not registered in goa.
Thanks.
The dealer in Goa has deducted tax under the the local VAT laws.
Please inform
a. is WC TDS applicable on interstate sales.
b. was the dealer in Karnataka required to register in the state of goa
c. manner of seeking refund of the TDS as the Karnataka dealer is not registered in goa.
Thanks.
02 December 2012
a) As separate contract for sale of goods (supply) is entered into, TDS is not applicable on sale and it is only on WCs.
b) Yes, required to be registered depending upon the volume of transaction.
c) If registered, the TDS amount will be adjusted against the output tax liability and after such adjustment resulted into refund, you may get the same. Morevoer, in the case of URDs, the TDS rate may also be on higherside which you please verify
b) Yes, required to be registered depending upon the volume of transaction.
c) If registered, the TDS amount will be adjusted against the output tax liability and after such adjustment resulted into refund, you may get the same. Morevoer, in the case of URDs, the TDS rate may also be on higherside which you please verify
03 December 2012
I agree largely with Mr Suryam. However, the following points need to be checked:
1. If the tender / enquiry for this particular work consists of both supply, installation and commissioning, then there are good chances that the ST authorities may view the transaction as works contract.
2. Whether there is a cross fall breach clause between the two contracts, i.e. failure to perform the second contract is the breach of overall contract.
3. If these two conditions above are established from the contract, then the transaction is a DEEMED SALE and is distinguishable from a PURE SALE.
4. In purusuance to the Finance Act, 2002 (w.e.f. 11/05/2002) Section 2 (g) of The CST Act, "sale" has been widened to include DEEMED SALES. Hence as a works contractor, it is our responsibility to inform the contractee (owner / employer) that certain items out of the contract are moved from outside the state and consequenlty not covered under the taxable turnover of the local state and in view of this, TDS under the local VAT Acts should not be applied on (a) Inter-state turnovers and (b) labour turnovers while releasing the payment.
5. Please find out whether your contractee has already remitted the TDS to the department. If it has been already done, then the only way is to declare these turnovers as exempted before the VAT Authorities and take refund of the same.
1. If the tender / enquiry for this particular work consists of both supply, installation and commissioning, then there are good chances that the ST authorities may view the transaction as works contract.
2. Whether there is a cross fall breach clause between the two contracts, i.e. failure to perform the second contract is the breach of overall contract.
3. If these two conditions above are established from the contract, then the transaction is a DEEMED SALE and is distinguishable from a PURE SALE.
4. In purusuance to the Finance Act, 2002 (w.e.f. 11/05/2002) Section 2 (g) of The CST Act, "sale" has been widened to include DEEMED SALES. Hence as a works contractor, it is our responsibility to inform the contractee (owner / employer) that certain items out of the contract are moved from outside the state and consequenlty not covered under the taxable turnover of the local state and in view of this, TDS under the local VAT Acts should not be applied on (a) Inter-state turnovers and (b) labour turnovers while releasing the payment.
5. Please find out whether your contractee has already remitted the TDS to the department. If it has been already done, then the only way is to declare these turnovers as exempted before the VAT Authorities and take refund of the same.
04 December 2012
Thank you Mr Suryam and Mr. Sarathy for sharing your opinions.
The question that stands out is whether the dealer in Karnataka was required to be registered in the State of Goa for execution of the works contract.
An explanation to the defn of sale under Goa VAt Act states "sale shall be deemed to take place in Goa if the goods are within Goa
(i) in case of specific or ascertained goods, at the time the contract of sale made; and
(ii) in the case of unascertained or future goods at the time of their appropriation to the contract of sale by the seller, whether the assent of the buyer to such appropriation is prior or subsequent to such appropriation."
Please share your valuable view
The question that stands out is whether the dealer in Karnataka was required to be registered in the State of Goa for execution of the works contract.
An explanation to the defn of sale under Goa VAt Act states "sale shall be deemed to take place in Goa if the goods are within Goa
(i) in case of specific or ascertained goods, at the time the contract of sale made; and
(ii) in the case of unascertained or future goods at the time of their appropriation to the contract of sale by the seller, whether the assent of the buyer to such appropriation is prior or subsequent to such appropriation."
Please share your valuable view
04 December 2012
You have provided only the definition of "sale". We have to read the Act & Rules together under "Registration". According to me, the registration is not required, if you have adequetly take care of such transactions by informing the employer, prior to such TDS deduction.
Now as the TDS has been effected, it has become necessary to report the turnover pertaining to this works contract.
Now as the TDS has been effected, it has become necessary to report the turnover pertaining to this works contract.
You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now
Click here to login now
Similar Resolved Queries
Unanswered Queries
- Is this income indian or foreign income?
- REGARDING GST ON COMMERICIAL PROPERTY
- 15ca /15cb whose income tax login? remitter or nri seller's login?
- RCM applicability on Rent Paid by Registered Person to Unregistered Landlord for Residental Building
- GST on export of services and Input Credit
- TDS U/S. 194NF
- Regarding Documentation & Compliances for Opening of Unit of Pvt Ltd.
- ITC temporary reversal and reclaim
- Applicable TDS rate for sale of property in Nov 2024
- Donation Receipt u/s 80G
- MIS MATCH OF INVOICE NUMBER
- VERIFICATION OF REFUND RELATED
- GST Regis.
- ITC c/f from FY2022-23 to FY2023-24 entered the same in table 8C of GSTR9 of FY 2022-23, in FY23-24
- Late filling fees Demand by gst office
- IGST Credit-Show cause notice issued-confusion
- Short and Excess provision of expenses
- Issue of gst e invoice
- Interchangeable words in accounts
- Adjusted profit/Loss in the case of LLP and Pvt. Ltd.company
Trending Online Classes
CAclubindia
