01 July 2010
WCT is a tax on transfer of property involved in excution of works contract.
For example, when a contractor undertakes to construct a building, materials like Bricks, cement, TMT Bar, stone chips, sand etc gets transfered to the contractee.
By a legal fiction, vide insertion of clause (29A)to Art. 366 of the constitution, such transfer are treated as deemed sale, and States were given power to impose sales tax(now VAT) on such transfer.
It is a VAT, although popularly termed as WCT.
By the state laws, the contractee is required to deduct certain %age and the balance is released to the contractee. This deduction is VAT TDS.
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