How to account for VAT on works contract.? wat is its rate ? Is set off from sale tax avialable? if yes then how?
Sneha (Utmani) Tilwani (Audit/acounts/taxation head) (93 Points)
18 June 2011How to account for VAT on works contract.? wat is its rate ? Is set off from sale tax avialable? if yes then how?
CA. ANKUR JAIN
(CA.....)
(2800 Points)
Replied 18 June 2011
WCT rate varies from state to state but the general rate is 4%....
its a form of VAT so can be adjusted finally against vat liablity....
for eg.
your vat liability is 5,00,000/-
contractor deducted wct Rs. 200000/-
Then you can adjust this in paying your vat liablity and pay vat Rs. 300000/-
kanagaraj
(CHARTERED ACCOUNTANT)
(793 Points)
Replied 18 June 2011
Dear Sneha,
If you choose compounding method then the entire TDS on WC may be adjusted.But no ITC is allowed to set off. If you do not choose the compounding method then the local taxes is to be applied after adjusting the ITC
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