TaxTMI 
TaxTMI 
work contract tax
21 Nov 2015 
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Works contract tax deduction applies on gross contract value despite separate labour and material breakdown.
Segregating labour and material components does not by itself eliminate liability for works contract tax; the contractee must deduct VAT-TDS/WCT on the gross contract value, deposit it with the exchequer and issue a certificate to the contractor, who may claim credit in VAT returns. Applicability and procedure vary by state, and the CST Act contains no provision for TDS on interstate works contracts. (AI Summary)
Segregating labour and material components does not by itself eliminate liability for works contract tax; the contractee must deduct VAT-TDS/WCT on the gross contract value, deposit it with the exchequer and issue a certificate to the contractor, who may claim credit in VAT returns. Applicability and procedure vary by state, and the CST Act contains no provision for TDS on interstate works contracts. (AI Summary)
In a work contract labour and materials seperately shown.VAT for material and service tax for labour claimed.Whether work contract tax for labour shall be deducted on payment.