WCT out side the state

[sachin kuchekar]

Hi,

Situation:one business entity  situated in Maharashtra who deals in Supply,Installation and commissioning.Which includes Service and Supply of goods both.company also able to identify the amount of service and amount of goods supplied.

However it is registered in maharastra only and they wants to do business with other state i.e Punjab. Currently company execute the transaction as service tax on service provided and WCT on goods supplied as applicable.

 

Now the issue is pujab commercial tax telling that company have to register to execute WCT in punjab.As per my knowledge in CST Act there are not mandatory to get registration.and scenario is that party in punjab agreed to allow maharastra party to charge WCT provided punjab party will not Input credit.

So,Kindly advice on how to avoid registration in PUNJAB!!!!(As it costs much to maharastra party)

 

 

AI Summary

Interstate VAT registration affects works contract tax; structuring invoicing can avoid foreign-state registration while preserving input credit.
State VAT/WCT is territorially governed and an unregistered out-of-state supplier may lead the purchaser to bear or deduct tax and lose input credit. Practical measures to avoid registration in the purchasing State include negotiating a lump-sum project price; having in-state purchases invoiced directly to the purchaser so they can claim VAT credit; arranging interstate supplier invoices directed to the purchaser under the interstate tax mechanism; invoicing supplies from the supplier state under the interstate tax rate; and invoicing the profit/labour portion from the supplier state as a service subject to service tax, leaving only income tax TDS.