Deduction inder DVAT-43 is appilicable to Interstate Sale?

[Rambabu Dompaka]

Dear Sir,

Below I’m mentioning my point of View for applicability of D VAT 43 (TDS on WCT) to our entity. Can you pls help in this regards

As per section 8 of the CST Act, transactions of Inter State Sales are liable for taxation under CST Act. State Government has no right to levy any tax on interstate sales. After insertion of works contract in the definition of sales under CST Act, interstate works contract (which were out of taxation purview due to legal fiction) has come under the purview of CST Act.

‘’NO STATE CAN LEVY TAX OR CUT TDS ON THE GOODS WHICH ARE IMPORTED (PURCHASED FROM OTHER STATE) AND WHICH ARE USED IN EXCUTION OF WORKS CONTRACT IN THAT STATE’’. The issue was considered by Gujarat HIGH COURT in LandT vs. Commissioner of Sales tax.

Even though, Our customers are deducting State TDS @ 4% and issuing DVAT-43.The same was not accepted in our state. So, what is the remedy for us Sir.

Please help on this matter.

With regards,

Rambabu.D

[YAGAY andSUN]

Dear Ram,

If you are executing works contract in the State of Delhi then as per the DVAT Act you would have to get the registration certificate under DVAT Act and get assessment done accordingly. You have specified correct legal position in terms of interstate works contract as no TDS is required to be deducted.

For getting the TDS as refund under DVAT Act you would have to get yourself registered/assessed under DVAT Act. This is the only remedy you have and you have to work on this.

Regards

YAGAY and SUN

Management, Business and Indirect Tax Consultants

[Rambabu Dompaka]

Sir,

Thanks for reply sir, we will work on this,

this is for only Delhi or appilicable to other state also?

With Regards,

Rambabu.D

AI Summary

Interstate Sales and DVAT-43: Navigating TDS on Works Contracts and CST Act Compliance. Is State Registration Necessary? A participant raised a query about the applicability of DVAT-43 (TDS on Works Contract Tax) to interstate sales. They noted that interstate sales are taxed under the CST Act, and states cannot levy taxes on goods imported for works contracts. Despite this, their customers are deducting state TDS at 4% and issuing DVAT-43, which is not accepted in their state. A consultant advised that for works contracts in Delhi, registration and assessment under the DVAT Act are necessary to claim a TDS refund, suggesting this as the sole remedy. The participant inquired if this applies to other states.