07 February 2010
can any body tell me wat is work contract tax? is laiblity of wtc is on us to deduct and deposit same to department, by issuing form-501? is it correct or anything else
08 February 2010
There is no legal term called WCT. It is actually Sales tax/ VAT payable on transfer of property involved in the execution of a works contract, commonly known as WCT.
Like any other transaction of sale, this is also charged by the seller i.e. the contractor from its customers (except in few cases in some States). As contractors are generally not so organised, the Government in order to protect its revenue, provides for deduction of tax at source by the contract, similar and in addition to the tax deducted under the Income Tax Act.
09 February 2010
As I have mentioned, the contractor is liable to charge tax on invoice and quite often, people term is as WCT in place of VAT.
A contractor can also pay tax under a composition scheme. In the composition scheme, tax is charged on the total value of the contract but at a lower rate. I have seen people terming as WCT.
Regarding form 501, can you please let me know the State you are referring to
CAclubindia
