Erection Commission - Works Contract Tax

[Ramesh M]

Dear Expert, I have confusion about Works Contract Tax !!

We are manufucaturing Engineering goods like Machinaries in Hyderabad and selling to Odisha under CST (covering entire goods value). While sending our goods for the feasible of transportation we are dismantling and loading into trucks and same is assembling at site, for which we are charging to customer as Erection charges and we are paying service tax on it. Now customer is deducting Works Contract Tax, which we executed works at their premises, is it right ? if it is yes !! under which act. I am paying CST while transferring goods for entire goods value and paying service tax for labor charges which was done at our customer premises. How works contract tax will attract, please guide me.

AI Summary

Works Contract Tax: separate interstate sale under CST plus invoiced erection service may preclude state WCT deduction.
Whether deduction of Works Contract Tax is appropriate where a manufacturer supplies machinery interstate under the Central Sales Tax regime and separately performs on-site erection billed as a service: one view treats the totality as a works contract taxable under state WCT with withholding, while the other treats separate CST taxed sale and separately invoiced service (with service tax) as outside state works contract withholding; inter state movement and judicial authorities may preclude state WCT deduction on the interstate turnover.