27 March 2009
Tax Calculation on WCT contract is quite tedis job due to combination of Labour & Material Component invoved into it, But to simplified it, all State has introduce Composite Schem for Work Contract, under which Contractor need to Pay only fixed rate of Tax on Whole Contact amount in ur case RA bill amount & take credit on Material purchase after keeping some % of retion on the same. Otherwise u can go genral method in which u need to calculate Purchase @ different rate of VAT & on the bais of It charge the vat rate on final material quatity involved into ur RA bill, but for that u need to establis one to one corelation & keep recored upto date for future assement. For Rate purpose u need to Check ur state act. But my advice is to go for Composit schem, becasue in this u do not need to mainain one to one corelation between input & delever material.
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