Vat on works contract

ak mangal (Engg) (52 Points)

14 June 2012  

Request answers to following:

1. What is Divisible or indivisible works contract. Does this relate to the way taxation is considered or whether it relates to admissibility of splitting of order/ responsibility?

2. Does divisible means two orders can be placed out of one tender? What are owner’s implications and liabilities for agreeing to place two orders when requested by vendor?  E.g., one for supply and other for installation?

3 .Please advise applicability of WCT and/or  service tax on divisible and indivisible works.

4. Por a work where prices for Supplies, Composite work and purely Services are separately indicated, can the taxation be applied to respective portioon independently as if these were three separete contarcts? i.e., ED/CST/VAT for Supplies, VAT(WCT) and service tax  for Composite part and Service tax for the purely services part?

5. If the vendor asks for re-imbursement of higher cenvat than quoted, will there be a problem in payment?

Regards,

AK Mangal