Work Contract Tax

[Asked by Guest]

(a) What is Work Contract Tax and what are the works and services covered under Work Contract Tax in Jammu.

(b) Recently my company invited the tender for SITC of batteries in Jammu. In the tender document, it was clearly written that the work is for Supply, Installation, Testing and Commissioning of Batteries which includes replacement of old batteries. After completion of the work, the party submitted their bill and was contesting that no WCT is to be deducted as they have supplied the batteries and they have not charged any amount for their services.

My question is whether WCT is to be deducted on such supply where the tender condition clearly says that the work is SITC and party after going through the tender document has submitted their offer.

Party's contention also seems to be right because they have supplied the batteries as the end product.

Please reply at the earliest because I have to clear the payment.

AI Summary

Work Contract Tax applicability when supply includes installation and commissioning - WCT may be deductible despite supplier claiming only goods
Where a tender expressly required Supply, Installation, Testing and Commissioning (SITC) and the contractor quoted an inclusive rate for SITC, the contractually required service elements are treated as part of the supply; supply attracts VAT, service tax was not leviable in Jammu & Kashmir, and Work Contract Tax-being a tax on transfer of goods-should be deducted. WCT is collected by deduction at source similar to TDS but is not TDS.