17 September 2008
SOME VENDORS DOING ELECTRICAL WORK FOR OUR CO. THIS INVOLVED N=BOTH MATERIAL & SERVICE.THEY ARE CHARGING 4%WCT ON THEIR BILL.
FOR EXAMPLE
Invoice gross amt 100
wct (4% on 100) 4
service tax (12.36%*33%)4.12
total 108.12
Now tell me whether we've to deduct the wct amt or not?if yes what should be the wct deduction amt.what is the procedure in payment?what forms are available .
18 September 2008
Scetion 22(4) of APVAT Act says about deduction @ 2% of the amount payable to Contractor. Though it is logical that no TDS should be deducted on service tax, it is advisable to obtain a claification from the appropriate authority in this regard. However, it will be safe to deduct2% on Rs. 108.12.
In case of a VAT dealer executing works contract for a company or a statutory body or an undertaking or an institution other than Government or local authority irrespective of the quantum of value of the contract or for any other dealer or a firm where the value of the contract exceeds Rs.10,00,000/- (Rupees ten lakhs only), a tax at the rate of 2% shall be deducted from the amount payable to him and such contractee deducting tax at source shall remit such amount in the manner as may be prescribed
CAclubindia
