Work Contract Tax

[Ranjana Trivedi]

My company worked as a Contractor and Vat & service tax both are applicable but my question is that what is the percentage of WCT. there are two options - 1. 67% of job Value vat is 12.5% and 33 % of job value service tax applicable 2. 80% of job value Vat is 12.5% and 20% of job value is service tax applicable. My question is what is better option which can apply and follow rules. My company deals with fabrication, erection and making of steel structures. please suggest me what I do?

AI Summary

Company Debates Optimal Work Contract Tax Approach Amid VAT and Service Tax Concerns; Considers Cost-Benefit and Exemptions A company involved in fabrication and steel structure projects questions the optimal Work Contract Tax (WCT) approach, considering VAT and service tax implications. Two options are presented: 67% job value with 12.5% VAT and 33% service tax, or 80% job value with 12.5% VAT and 20% service tax. One respondent suggests verifying service classification and possible exemptions, recommending a composition scheme for both taxes after a cost-benefit analysis. Another respondent highlights the practice of applying 12.5% VAT on 80% and 12.36% service tax on 33%, noting a software compatibility issue with Tally.