14 July 2011
Works contract tax under VAT has to be deducted from the bill amount alone ie., VAT and ST levied need not be considered for WCT deduction.
12 June 2014
TDS is to be deducted on Value + VAT (excl. Service Tax). Also, WCT needs to be deducted on Basic Value (excl. all taxes).
Reference: This is as per new circular 01/2014 dated 13.01.14 issued by Central Board of Direct Taxes, India to get exemption on TDS on service Tax. No TDS on Service Tax if Shown separately under all sections on payment to resident.
Hence, TDS is to be calculated on the Basic Amount + VAT (if applicable - In case of Work Contract Tax) and not on the Gross Amount [or TDS is to be calculated only on the Basic Amount (if VAT is not applicable)]. Service Tax component is to be excluded from TDS calculation.
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