Vat liability - input of vat

[Asked by Guest]

I have an order for construction of a power plant which involves supply of several items including civil works. I have placed a order on sub contractor for civil items (eg 10 Cr). The civil contractor purchases local material. The contractor pays the VAT by normal method and gives me the certificate of the same. Now my billing to customer is 11 Crs(1 cr is my profit margin). How much VAT liability i have to carry(pay), will i get any VAT input credit.

[Mukesh Kumar]

As per the orde of high court (and i believe confired by the SC, once a sub-contractor pays VAT on some part of contract, the same is not includibe in the value of main contractor. Or the same would be excluded from the contractor's value of contract. The citatio of the case is - 2008 TMI - 30512 - SUPREME COURT -

AI Summary

VAT input credit: subcontractor-paid VAT may be excluded from the main contractor's taxable value, reducing liability.
A contractor asked whether VAT paid by a subcontractor and evidenced by a VAT payment certificate must be included in the main contractor's taxable value. The reply, citing judicial authority, states that VAT paid by a subcontractor on part of a contract is to be excluded from the main contractor's contract value for VAT purposes.