Concept of Interstate Works Contract

[Srivatsan Krishnamachari]

Dear Experts

Kindly clarify me below points related to Interstate works contract.

we have mfg unit Telangana and we received works contract to be executed at Bihar. We are purchasing all the material required for executing this works contract at Telangana and sending the same to Bihar except some items. In taxation point of view, How much % of sales tax or CST i need to pay and how much Excise amount i need to pay.and Service Tax amount. Is there any exemption notifications related to Excise & Service tax.

Thanking you in advance.

Regards

Srinivas

AI Summary

Interstate works contract: tax treatment depends on contract nature; local procurement may protect VAT credit and affect indirect taxes.
Interstate works contract raises allocation of indirect tax liabilities-CST/VAT, excise and service tax-when materials bought in the manufacturer's state are sent to the work site in another state. Tax consequences depend on the nature of the project and contract specifics; local procurement at the site may preserve VAT credit subject to exclusions. Further factual details are required to determine excise and service tax exemption eligibility and exact CST/VAT treatment.