11 September 2011
1. we are providing service of laying of LAN,WAN , NETWORKING. 2. we get the contract from the companies for laying of the network and for sale of items.( i.e divisible contract). Normally the contract take 2 to 3 month to complete. 3 my question is what kind of registration we required in Delhi vat . should we go for simple registration or should we go for works contract registration. 4. and also how should we account for income from these work contract. the bill for laying of lan and for sale of material is issued after completion of contact
12 September 2011
Mr Sandeep, This comes under normal VAT registration,because you are engaged in sale and works contract also.If your contract is fully divisible,i.e.you raise bills for labour charges and sale of materials separately the matter becomes very easy.You can claim exemption on all labour charges and declare the sales only. If you are doing a composite contract,i.e. quoting rates on the finished work,then you have to account the labour expenses and works expenses properly and claim exemption on them. The balance amount will be taxable. MJK
1. how should we account for income from these work contract. the bill for laying of lan and for sale of material is issued after completion of contact. do we have to make provision for contract on percentage completion method in respect of project which are started before march 11 and which will be finalised in next financial year and bill will be raised in next financial year
17 September 2011
Mr Sandeep, You can raise bills for laying of lan and supply of materials seperately. For the incomplete works remaining at the end of the year suitable provision has to be made in the form of work-in-progress and in the next financial year bill may raised after completing the work. MJK
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