Works contract applicability

This query is : Resolved

Bhanu (Querist)
Follow

22 June 2013 Sir,

My company main activities are Vessels repairs,reconditioning,vessel painting and etc, whether these services are comes under ST WCT-Original services(40%) or Repairs services (70%) or Others (60%), please give me clarification to my mail ID bhanutrp@gmail.com.

Thanks in Advance,

Bhanu

CA. C V SURYAM

CA. C V SURYAM (Expert)
Follow

23 June 2013 The said service falls under 70% category as the work involved is repairing of goods i.e, vessel. Any materials are received by you from customer free of cost, then value of such materials are also to be added to the contract price before applying the abatement rate.

Bhanu

Bhanu (Querist)
Follow

24 June 2013 ok, thank you sir, and one more double on the same thing.

Our Business situated in A.P.

Now We are charged APVAT@70% on Gross amount to client is it correct or not. If yes total tax APVAT@70% & Service Tax@70% on Gross amount.

Please clarify me.

Thanks in advance,

Bhanu

Upgrade to CAclubindia Pro. Subscribe Now!

Bhanu

Bhanu (Querist)
Follow

28 June 2013 Please reply me

CA. C V SURYAM

CA. C V SURYAM (Expert)
Follow

28 June 2013 APVAT: Why do you resort of Rule 17(1)(g) which will result into payment of higher VAT under WC? Instead, you may choose the option u/s 4(7)(1)(a) or (b)being the nature of work is WC. Note: No ITC under your present option and also under (b) above. The rate of tax under your present option is 14.5%. It is not advisable to do so. You have to plan an efficient tax mechanism.

SERVICE TAX: Already replied and holds good irrespective of your option under VAT.