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Taxes on demolition of building and scrap sale

Ameya Pawar (Contracts Manager) (32 Points)

27 June 2012

Dear Experts,

We have planned to demolish our factory. But i am not aware what taxes will applied for it.

Contractor will demolis the factory and will take out scrap, steel, debris. For taking this material out he will pay us around 15,00,000/-. But i am not aware what taxes i need to apply for this.

Will i have to charge VAT on sale of Steel Scrap. or lumpsum of TCS 2%.

Kindly advise the actual tax applicable for this kind of work.

Thanks in Advance

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1 Replies

CA Dipti Pawar (Job) (105 Points)
Replied 27 June 2012

Schedule Entry No	:	C-55
Commodity	:	Iron and steel
Descripttion	:	Iron and steel, that is to say, (i) pig iron , sponge iron and cast iron including ingots, moulds, bottom plates, iron scrap, cast iron scrap, runner scrap and iron skull scrap; (ii) steel semis (ingots, slabs, blooms and billets of all qualities, shapes and sizes); (iii) skelp bars, tin bars, sheet bars, hoe bars and sleeper bars; (iv) steel bars (rounds, rods, square flats, octagons and hexagons, plain and ribbed or twisted in coil form as well as straight lengths); (v) steel structurals (angles, joints, channels tees, sheet pilling sections,Z sections or any other; rolled sections); (vi) sheets, hoops, strips, and skelp, both black and galvanised , hot and cold rolled, plain and corrugated, in all qualities in straight lengths and in coil form as rolled and in revetted conditions; (vii) plates both plain and chequered in all qualities; (viii) discs, rings, forgings and steel castings; (ix) tool, alloy and specials steel any of the above categories; (x) steel melting scrap in all form including steel skull turning and boring; (xi) steel tubes , both welded and seamless, of all : diameters and lengths, including tube fittings; (xii) tin plate , both hot dipped and electrolytic and tin free plates; (xiii) fish plate bars , bearing plate bars, crossing sleeper bars, fish plates, bearing plates, crossing sleepers and pressed steel sleepers, rails heavy and light crane rails; (xiv) wheels, tyres, axles and wheel sets; (xv) wire rods and wires-rolled, drawn, galvanized, aluminized, tinned or coated such as by copper; (xvi) defectives, rejects, cuttings or end pieces of any of the above categories.
Rate of Tax	:	4% (1.4.2005 to 30.4.2011) 5% (from 1.5.2011 to date)