Liability for DVAT registration

[BAL KRISHAN GARG]

Dear All Members, A is doing job work in a factory premises of B on the raw material provided /related to B in electrical home appliances alongwith his labour and billing is being made on the basis of completion of work by A and his labour on monthly basis . My query is whether he is liable to be registered under DVAT ? Billing will be approxmately Rs. 4 to 5 Lacs per month basis .although there is no agreement between A and B but the understanding is that payment will be made on piece rate basis and there is no work contract between them . if yes , on what rate of dvat he is to made upon B .I will be highly oblidge . Thanking you , BAL KRISHAN GARG

AI Summary

Clarification on DVAT registration: Labor contractor may avoid VAT, but independent contractor faces similar VAT liability. A query was raised regarding the liability for DVAT registration for an individual, A, performing job work in the factory of B using B's raw materials for electrical home appliances. A bills monthly based on work completion, amounting to approximately Rs. 4 to 5 lakhs, without a formal contract. The response clarified that if A acts solely as a labor contractor, VAT may not apply. However, if A operates as an independent contractor, VAT liability would be similar to that incurred if the work was done from A's own premises.