setoff the purchase tax liability from W.C.T./T.D.S.

[Jasbir Uppal]

 

Dear Sir, 

A civil work  contractor case, T.D.S.  is being deducted at source by the contrecttee, applicant  purchased goods from unregistered dealers  which in turn used  in works contract and providing purchase tax liability in our books of accounts. The such contractor can setoff the  purchase tax liability from the WCT-TDS. Please also provided relevant apex court ruling 

[YAGAY andSUN]

It is not allowed.

[Jasbir Uppal]

 

Even the Definitions  of section 2(p) of UPVAT act set off the  purchase tax liability from the WCT-TDS is not allowed section 2(p) coated here under:-

2(P) “Input tax”, in relation to a registered dealer who has purchased any goods from within the State, means the aggregate of the amounts of tax – (i) paid or payable by such registered dealer to the registered selling dealer of such goods in respect of purchase of such goods and (ii) paid directly to the State Govt. by the purchasing
dealer himself in respect of purchase of such goods where such purchasing dealer is liable to pay tax under this Act on the turnover of purchase of such goods.
‘Tax’ – means a tax leviable under this Act, on the sale or purchase of goods other than news papers; and shall include, - (a) tax or lump sum as the case may be payable, in lieu of actual amount of tax due on turnover of sales, in accordance with provisions of Section 6; or
(b) Amount of reverse input tax credit, Difference between the tax and input tax is minute as – ‘Tax’ means a tax leviable under this Act on sale or purchase of goods (both) while ‘input tax’ is aggregate amount of tax, paid or payable by registered dealer to registered dealer and paid directly to the State Govt. on purchases of goods only.

 

Ple. advised

 

With regards

 

(J.S. Uppal)

 

AI Summary

Contractors Cannot Offset Purchase Tax Liability Against WCT-TDS, According to UPVAT Act Section 2(p) A discussion on a forum involves a query about whether a civil work contractor can set off purchase tax liability against WCT-TDS. The contractor purchased goods from unregistered dealers, incurring purchase tax liability recorded in their accounts. Two replies clarify that such a setoff is not permissible. One response cites the UPVAT Act, specifically section 2(p), explaining that input tax pertains to tax paid on purchases from registered dealers or directly to the state, and it cannot be set off against WCT-TDS. The discussion emphasizes compliance with tax regulations and definitions under the relevant tax act.