Should i charge vat or work contract tax?

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

16 August 2011 My Company has VAT and CST registration for dELHI, we executed an Works Contract project in Mumbai for a client based in Mumbai. The billing will be from our Delhi Officew. My questions are
Since the works contract has been executed outside Delhi, is VAT applicable on the bill amount ? ie. Should I charge VAT to the client ?if yes what percentage
or should i charge work contract tax? and what percentage?

C A S.S.Agarwal, M.Com.,LL.B,

C A S.S.Agarwal, M.Com.,LL.B, (Expert)
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16 August 2011 VAT & Service Tax both will be applicable if it is a composite contract. If your are executing contract in Mumbai then M. VAT registration is also required and VAT is to be paid in Mumbai

MJ Krishnamurthy

MJ Krishnamurthy (Expert)
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21 August 2011 Mr.Author,
If you are carrying the required material from Delhi to Mumbai to be used in the works contract then you have to charge CST at the same rate of DVAT.If youu are purchasing all the material used in the contract at Mumbai, then you will have to register under Maharashtra VAT Act before commencing the project. The local rate of vat will be(12.5%)applicable.you can also avail ITC of vat paid on local purchases.
MJK

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