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Work contract tax-wct

shyam (CA Final Student) (166 Points)

10 February 2014

Contractor is engaged in Construction of Railway Track for Power Plant. 1-At what rate MPVAT(WCT) to be deducted for work executed by Contrctor at MP state. 2- At what rate UPVAT(WCT) to be deducted for work executed by Contrctor at UP state. Out of work done by contractor, following dedutions required to be made: MPVAT(WCT), UPVAT(WCT) MPCESS UPCESS

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MJ Krishnamurthy (ACCT(Retd)) (7197 Points)
Replied 11 February 2014

Mr Shyam,

Sec 26 of MPVAT Act and Sec 34 of UPVAT Act apply to the TDS to be made with respect to contractors. In these sections it is stipulated that a contractee(Central Govt,and State Govt departments and organisations)has to make TDS equal to the amount payable to the contractor. If the contractor has charged any VAT in hs bills that amount or the actual liability.In MPVAT only 2% to be deducted if the contractor is under composition and 1% only if the works is consisting of 50% or more of labour content.Under UP VAT Act,a contractor can do TDS from payments made to his subcontractor also.When this is done, the contractee of main contractor has to reduce the TDS by the amount already done by the contractor......mjk