28 November 2012
My client is a builder & Developer.He subcontracts the construction work to the Contractor.During the process of construction of building my client has done the agreement to sale contract with the various customers.client has received form 407/408 from s/contractor say Rs.90/- & My Client's value of agreement to sale is Rs.100/-. S/contractor has paid the Vat [on Rs.90/-] Now my query is whether my client have to pay the vat on the Diff.amount of Rs.10/- [100-90]?
03 December 2012
Ms Anita, Here the builder,your client, has to enter into a contract fo constructing flats to his customers.So, his recipts becomes a contractor's turnover. He can deduct the payment made to his subcontractors and th balance becomes his taxable turn over.Of course,he may reduce the cost of land and amenities from his receipts to arrive at the actual taxable value.....MJK
CAclubindia
