works contractor under composition scheme

[Suneel Kumar kota]

When the works contractor is under composition scheme under APVAT Act 2005 if he charged vat tax @ 5% seperately is valid or not? if not valid what is the reason? if valid any case law is available for that?

[YAGAY and SUN]

Dear Sunil,

Works Contractor can either charge VAT in lieu of WCT or WCT at applicable rate, alone. But both taxes cannot be charged on the bill issued by the works contractor simultaneously.

Regards,

YAGAY and SUN

(Management, Business and Indirect Tax Consultants)

AI Summary

Works contractor VAT charging: contractor may charge VAT in lieu of WCT but cannot levy both concurrently. A works contractor under a composition scheme may not charge VAT and Works Contract Tax simultaneously on the same bill. The contractor must apply either VAT in lieu of WCT under the composition arrangement or charge WCT alone; both taxes cannot be levied concurrently.