WCT & VAT

Page no : 5

Hemant Kumar (Salaried) (20 Points)
Replied 29 August 2008

Originally posted by :Shakil Ahmed
"	Dear Sir, Please tell me the date since WCT (Works contract tax) has been discontinued in the 4 states named Andhra Pradesh, Haryana, Delhi & UP. Please give me Date and if any refrence book or site is there please tell me. Thanks	"

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(Guest)

Pls send more information regarding WCT to deducted from contractor/sub contractor & Service tax on work contracts

(Guest)

Originally posted by :Guest
"	PLZ, TELL ME ABOUT VAT & WCT	"

(Guest)

Originally posted by :Shakil Ahmed
"	Dear Sir, Please tell me the date since WCT (Works contract tax) has been discontinued in the 4 states named Andhra Pradesh, Haryana, Delhi & UP. Please give me Date and if any refrence book or site is there please tell me. Thanks	"

(Guest)

Dear,

Sir, pls you conferm me about this WCT.

Thanks

Anil Negi

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Rohtash (Executive Accounts) (26 Points)
Replied 15 September 2008

please forward me wct detail structure under Delhi vat and its certificate claim and deposit form for monthly basis

(Guest)

Originally posted by :Guest
"	Sir Pls tell me full deail about WCT i.e. Haryana & Rajasthan Thanks & Regards	"

(Guest)

Originally posted by :Guest
"	Sir Pls tell me full deail about WCT i.e. Haryana & Rajasthan Thanks & Regards	"

CA. O.P. Agarwalla (C.A.) (2916 Points)
Replied 16 September 2008

The first landmark judgment after the enactment of the amendment was delivered by the Supreme Court in the case [1989] 073 STC 0370- - Builders Association of India and Others Vs. Union of India and Others (and connected writ petitions and appeals) (SC-2 Judges). In that case, two points were raised before this Court:

1) Whether the Forty-sixth Amendment was unconstitutional for the reason that it had not been ratified by the Legislatures of not less than one-half of the States by resolutions passed to that effect by those Legislatures before the Bill which led to the amendment in question was presented to the President for assent; and

2) it was not open to the States to ignore the provisions contained in article 286 of the Constitution and the provisions of the Central Sales Tax Act, 1956, while making assessment under the sales tax laws passed by the Legislatures of the States.

The Court rejected the first contention and upheld the validity of the Forty-sixth Amendment. As regards the second contention, the Court declared that "sales tax laws passed by the Legislatures of States levying taxes on the transfer of property in goods (whether as goods or in some other form) involved in the execution of a works contract are subject to the restrictions and conditions mentioned in each clause or sub-clause of article 286 of the Constitution".

The law laid down in the above judgment was reiterate by the Constitution Bench in the case - [1993] 088 STC 0204- - Gannon Dunkerley & Co. Vs. State of Rajasthan, Larsen & Toubro Ltd. Vs. Union of India (SC-5 Judges). The bench laid down the following principles for the purpose of tax on deemed sales:

1. in exercise of its legislative power to impose a tax on the transfer of property in goods involved in the execution of a works contract under entry 54 of the State List read with article 366(29-A)(b), cannot levy such a tax in respect of transactions which are in the nature of sales in the course of inter-State trade and commerce or are sales outside the State levying such tax or are sales in the course of import inasmuch as it is beyond the legislative competence of the State Legislature to impose a sales tax on inter-State sales as well as sales outside the State and sales in the course of import or export.

2. The provisions of sections 3, 4, 5 and sections 14 and 15 of the Central Sales Tax Act, 1956, are applicable to a transfer of property in goods involved in the execution of a works contract covered by article 366(29-A)(b).

3. While defining the expression "sale" in the sales tax legislation it is open to the State Legislature to fix the situs of a deemed sale resulting from a transfer falling within the ambit of article 366(29-A)(b) but it is not permissible for the State Legislature to define the expression "sale" in a way as to bring within the ambit of the taxing power a sale in the course of inter-State trade or commerce, or a sale outside the State or a sale in the course of import and export.

4. The tax on transfer of property in goods (whether as goods or in some other form) involved in the execution of a works contract falling within the ambit of article 366(29-A)(b) is leviable on the goods involved in the execution of a works contract and the value of the goods which are involved in the execution of works contract would constitute the measure for imposition of the tax.

5. In order to determine the value of the goods which are involved in the execution of a works contract for the purpose of levying the tax referred to in article 366(29-A)(b), it is permissible to take the value of the works contract as the basis and the value of the goods involved in the execution of the works contract can be arrived at by deducting expenses incurred by the contractor for providing labour and other services from the value of the works contract.

6. The charges for labour and services which are required to be deducted from the value of the works contract would cover

(i) labour charges for execution of the works,

(ii) amount paid to a sub-contractor for labour and services,

(iii) charges for obtaining on hire or otherwise machinery and tools used for execution of the works contract,

(iv) charges for planning, designing and architect's fees, and

(v) cost of consumables used in the execution of the works contract,

(vi) cost of establishment of the contractor to the extent it is relatable to supply of labour and services,

(vii) other similar expenses relatable to supply of labour and services, and

(viii) profit earned by the contractor to the extent it is relatable to supply of labour and services.

7. To deal with cases where the contractor does not maintain proper accounts or the account books produced by him are not found worthy of credence by the assessing authority the Legislature may prescribe a formula for deduction of cost of labour and services on the basis of a percentage of the value of the works contract but while doing so it has to be ensured that the amount deductible under such formula does not differ appreciably from the expenses for labour and services that would be incurred in normal circumstances in respect of that particular type of works contract. It would be permissible for the Legislature to prescribe varying scales for deduction on account of cost of labour and services for various types of works contract.

8. While fixing the rate of tax it is permissible to fix a uniform rate of tax for the various goods involved in the execution of a works contract which rate may be different from the rates of tax fixed in respect of sales or purchase of those goods as a separate article.

(Guest)

Dear Sir,

wish to know effective date of discontinuation of WCT in Haryana

any notification on this

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(Guest)

Originally posted by :Guest
"	Need to know more about WCT in AP	"

(Guest)

Originally posted by :Guest
"	WCt now How Much Tax Percentage?	"

(Guest)

Originally posted by :Guest
"	WCt now How Much Tax Percentage?	"

sankar024 (Finance Professional) (35 Points)
Replied 24 September 2008

Originally posted by :Guest
"	PLZ, TELL ME ABOUT VAT & WCT	"

it more are or similar to wct but if u do the vat wc then u cant enjoy the input tax for purchases and u should not buy the material against the c declreation. bcz asper vat we can go uniform .if u r doing works contract then u have to give declretion letter to AO and go for composite tax rate of 2% or 4 %

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(Guest)

Originally posted by :Shakil Ahmed
"	Dear Sir, Please tell me the date since WCT (Works contract tax) has been discontinued in the 4 states named Andhra Pradesh, Haryana, Delhi & UP. Please give me Date and if any refrence book or site is there please tell me. Thanks	"