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Works Contract under VAT

CA. C V SURYAM (Practising Chartered Accountant) (865 Points)

16 November 2008

Dear co-experts/queriests, one appeal to all from me.
When a question is asked or posting a topic on VAT, please remember to mention in message title the name of the State since VAT is different from State to State. This will draw immediate attention of the readers/experts. We all will have to bear this in mind atleast till 2010 by this time VAT will be replaced by GST, hopefully. Thanks.

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10 Replies

athem (accountant) (27 Points)
Replied 18 November 2008

just i want clarification of VAT on Consturctions and Service tax pls kindly help me

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athem (accountant) (27 Points)
Replied 18 November 2008

just i want clarification of VAT (Tamil Nadu ) on Consturctions and Service tax pls kindly help me

MANISH (SERVICE) (26 Points)
Replied 19 November 2008

Originally posted by :CA. C V SURYAM
"	Dear co-experts/queriests, one appeal to all from me. When a question is asked or posting a topic on VAT, please remember to mention in message title the name of the State since VAT is different from State to State. This will draw immediate attention of the readers/experts. We all will have to bear this in mind atleast till 2010 by this time VAT will be replaced by GST, hopefully. Thanks.	"

CA. C V SURYAM (Practising Chartered Accountant) (865 Points)
Replied 19 November 2008

Under TN VAT, there are two schemes are available for payment works contract tax (WCT). One is composition and other is non-composition. Under composition scheme, different rates of taxes are given and WCT is arrived at by applying these rates on the gross amount. No ITC benefit and the dealer is not allowed to purchase goods from out of the State. Under regular scheme, as per the provisions, WCT is arrived at by giving deduction for various expenses like labour, administration, profit relating to labout, planning, designing expenses etc from the gross amount and the balance is chargeable to WCT at the scheduled rates of goods. But as per the practical scanario prevelant in the trade and the department is to pay WCT on landed cost of purchases at the applicable scheduled rates after adding gross profit to above. ITC is availabel under this scheme. The works contractor shall not be eligible to opt different schemes for different works. That means, he should be either composition or non-composition for all the works being executed in TN.

WCT TDS provisions are exist and again the rate of deduction differs from nature of contracto to contract. Not deduction of TDS provisions are exist. Anything else, please revert to me.

(Guest)

sir,

if a dealer has taken EC for contracts then he has needed bils or not

Causal Commodities, expenses upon transportation is more than its cost

department charging tax on its transportation whether it is right or wrong if it is wrong then pls provides me any case laws

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(Guest)

I have to execute a work contract in Delhi which involves material + labor. What are the option available to me for Sales Tax on Work Contract and Service Tax on Work contract. My material value is 83 % and labor is 17 %.

(Guest)

I want to know about vat rate under west bengal govt. regarding sale of old car and we execute the works contract without any material is there is any liability to pay the vat tax or not. if not then please let me know how can i get relief from the sales tax authority

thanking you

S.Jegadeesan (CA Student) (637 Points)
Replied 22 July 2010

Dear Sir/madam,

I want to clarify one doubt regarding WCT under TNVAT.

i.e. M/s JK Ltd(Who rendering the Services) executing the contract of construction on behalf of M/s. L & T Ltd(who availed the services) in a SEZ.

Now L & T Ltd pay the Contract amount without deduct WCT @ 2% & ask JK Ltd to pay the WCT & Get the receipt then return to them( L & T Ltd)

Normal Procedure is L & T Ltd should deduct the WCT & Pay the WCT through Form R & Issue Deduction Certificate in Form T with ack of CTO/AC

But in this case the L & T Ltd not deduct the WCT & Paid directly. But it asks to pay the WCT & ask to get the receipt from CTO/AC.

Actually this is valid one?

L & T Ltd shall ask like that?

If yes What are the formalities should be fulfilled by the contractor.(JK Ltd)?

Which form should be used for pay the WCT if WCT paid by the Contractor?.

S.Jegadeesan

Surajit (Asst. A/c) (22 Points)
Replied 17 February 2011

Dear Sir/Madam,

I WANT TO CLARIFY ONE DOUBT REGARDING WCT UNDER WBVAT.

we are received part of equipment on returnable basis after the modification. The client also issued us a service order for that job. We are send the part of equipment after modification and issue a service tax invoice. At this situation we are confused that the WCT are involvement or not.

Surajit