We are a contracts firm in chennai and generally as per the TNGST act, we are not supposed to engage in Works contract using materials procured from other states. We have to buy the same under a trading agency and resell the same to our contracts firm.
Since we are planning to open up a branch in Bangalore with proper registration under works contract, is it possible for us to buy materials from Gujarat under 2% (C-form) CST and use the same in our works contract without paying material tax to the government. (Under works contract, we presume that we will be under composite tax and we will be paying 2% or 4% works contract tax.) Is it truly possible? One of our prominent cleint under whom we are expecting an order says this is what they have been doing for the past 15 years with all their sub-contractors? Please advice.
Regards
MURALI.
CAclubindia
