VAT (Interstate Transation-Works Contract)

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Ajith R Chandra (Querist)
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31 March 2009
Friends i present you the situation herein below and hope to get some of your answers:

We have company situated(Regd Office) in Bangalore, Karnataka. We deal in Corporate Interiors (Works Contract). Recently we are about to get a contract in chennai,Tamilnadu.
Now i want to know how to deal with this.

1.Should i show the Chennai Work as Interstate works contract? If yes, then what is the VAT(Percent) i can claim from my client? whether C Form can be issued by my client for Works Contract?

2.Should i register for VAT in chennai and treat the contract as Local (for Chennai)

Please put some light on this

Regards
Ajith

CA. O.P. Agarwalla

CA. O.P. Agarwalla (Expert)
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31 March 2009 Dear Ajith,

Inter State works contract is nothing but an inter state sale. In your case, reply can be made that:-
If all the goods specifically required to be used in the execution of wc are brought to any state as per terms of the contract, it will fall under the ambit of inter state sales.
However, there are some difficulties in this.
U may pl. refer the following case for required precaution-
J.D.P. Associates v. State of Tamil Nadu (2003) 131 STC 334 (TNTST),