06 February 2013
Hi, I m working as an accountant at the engineers office engaged in the buisness of Packing of various machineries and components in the companies. In packing Ply wood and Pine wood is bieng used. My query is that which tax (VAT/ Service tax/ Work contract Tax)should be added in the bill so as to comply with the law. Also what rate of tax is bieng applicable?
WE HAVE TO UNDERSTAND FOLLOWING THING BEFORE DISUSSING ABOVE MENTIONED QUESTION.
WCT : THE WORK WITCH INVOLVE SUPPLY OF GOODS AND LABOUR.
CATEGORY : WCT CAN BE CATEGORIZED UNDER FOLLOWING CATEGORY.
@ GOODS AND LABOUR PART IS DEFINED. @ VALUE OF BOTH ARE NOT DEFINED.
IMPLICATION : @ WHETHER GOODS ARE CHARGEABLE TO VAT
@ AND LABOUR ATTARACT SERVICE TAX.
METHOD : @ WCT INVOLVE DIFFERENT TYPE OF GOODS LIKE 5% AND 12.5% . THAN WHAT WILL BE VAT RATE TO BE CHARGED.
@ IF GOODS IS DEFINED LIKE THIS IS 4% AND OTHER THAN WILL CHARGED VAT ACCORDINGLY.
@IF GOODS AND LABOUR PART IS NOT DEFINED THAN . VAT ACT HAS PRESCRIBED A DIFFERENT TYPE OF JOB CATEGORY AND PERCENTAGE TO CHARGE VAT.
@ IN THIS SITUATION . DEVIDED THE SALE ACCORDING TO RATIO OF MONTHLY PURCHASE. THAN MAKE REVERSE CALCULATION OF OUTPUT VAT. NOTE : IN THIS CONDITION INVOICE WILL BE RAISED INCLUSIVE OF VAT.
AND ACCORDING TO SERVICE TAX LAW CHARGED 12.36% ON 33% ACCORDING TO ABATEMENT RULE.
SECONDLY IMPORTANT THING
@ SOME STATE HAS DEFINDED SEPRATE WCT TAX RATE FOR WCT WORK. @ YOU CAN GO COMPOSITION SCHEME . IT IS ALMOST EQUAL TO 4%. @ YOU CAN GO COMPOSITION SCHEME FOR SERVICE TAX THAT IS ALSO 4.67% APPROX.
IF YOU FACE ANY DIFFICULTY TO UNDERSTAND PLS REVERT.
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