Concept of Works contract with Example? AND What is the meaning of stock transfer? AND What is the difference between works contract and stock transfer with justifiable example.
Shyam Kanabar (Article) (160 Points)
15 December 2011Concept of Works contract with Example? AND What is the meaning of stock transfer? AND What is the difference between works contract and stock transfer with justifiable example.
vishnupriya
(CA Final)
(1418 Points)
Replied 15 December 2011
WORKS CONTRACT:
The rate of servicetax is 4% under composition scheme and service tax becomes chargeable on receipt of the payment and on the amount for receipt.
vishnupriya
(CA Final)
(1418 Points)
Replied 15 December 2011
Difference:
Works Contract resembles providing of service (in general it means sale of service) but stock transfer is not a sale, so it is mandatory to submit Form-F before transfer of stock to avoid tax.
Stock transfer/branch transfer is not subject to tax since there is no ‘sale’.
Stock transfer can be only of standard goods. Stock transfer of tailor made goods for a specific customer is a bogus stock transfer. It can be held as inter-state sale and sales tax may be payable.
If buyer is identifiable before goods are dispatched, it is ‘Inter State’ sale and not a ‘stock transfer’.
If the transfer involves non-standard goods or different types of goods, then that will be works contract.
GSTR 9 and 9C for FY 23-24 as amended by Notification 12/2024 dated 10th July 2024(with recording)
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