please explain about vat calculation on works contract when books maintained correctly and when not maintained
1. what is sale figar/receivable amount 2. what we should when cst purchase was there 3. what is input 4. what is output 5. how to know what is the tax payable amount
24 August 2014
Whatever a contractor charges for the work done by him to the contractee is the receivable amount.This will be more than the actual sum paid to him due to some deductions.Deductions such as: 1)recovery of advances in% basis,2)IT TDS,3) ST TDS 4)Security deposit 5)material supply 6)penalties 7)Charges for the services provided by the owner/contractee 8)VAT TDS etc.Deductions can be allowed on Sl No1,if tax is already paid on initial advances. Item No 3,6 and 8 can be allowed.Item nos 4,5,and 7 should not be allowed.But when the security deposit is refunded later it need not be taxed.Apart from this actual expenses incurred towards labour and establishment expenses at work site(likewater,electricity,hiring of machinery etc),added with GP can be claimed as exemption.The balance is taxable amount @14.5% or 5.5% as per the goods used.This is output tax.The tax/vat paid on purchases of goods consumed is the input tax. Tax payable is output-input.The vat paid on interstate purchases should not be included in the input.This is the general pattern under normal VAT scheme.Under composition scheme it differs a bit.....mjk
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