Rate of VAT applicable on a work contract of civil as well as fixing of furniture with material,

[d.v. gupta]

dear all, we have undertaken a work contract of civil as well as fixing of furniture with material. we have used goods of 4% vat as well as 12.5% vat. as per works contract act we have to apply vat on 75% of contract value. let me know the rate of vat applied on 75% contract value in view that we are using 4% as well as 12.5% items in execution of work. in my opinion it should be taxed at 12.5%. kindly discuss if othe rate apply.

AI Summary

Clarification on VAT Rates: 4% for Unaltered Goods, 12.5% for Standard Works Contract as per Works Contract Act. A query was raised regarding the applicable VAT rate on a work contract involving civil work and furniture installation using materials taxed at both 4% and 12.5% VAT. The inquirer suggested applying a 12.5% VAT rate to 75% of the contract value, as per the Works Contract Act. In response, it was clarified that if the goods taxed at 4% are transferred in the same form, the VAT rate remains 4%. Otherwise, the standard VAT rate for executing a works contract is 12.5%.