Contactors Taxation

[Khushwant Singh]

What is tha procedure for taxing contractors (civil) under the Punjab VAT Act?

[YAGAY and SUN]

Refer Section 27 of the PVAT Act regarding Tax deduction from the amount payable to works contractor.  Further, Civil Contractor are liable to charge WCT at the applicable rate. It is also mandatory for them to get their assessment done from the PVAT Department. Three schemes are available to the contractor.

1. Civil Contractor can charge WCT on Actual supply;

2. Civil Contractor can avail abatement on services/labour part and charge WCT on supply of material involved in execution works contract.

3. Composition scheme

 

AI Summary

Works contract tax: contractors must charge WCT, obtain PVAT assessment, and choose among three compliance schemes.
Civil contractors must charge Works Contract Tax and obtain PVAT assessment; tax is deductible from amounts payable to works contractors. Contractors may follow one of three schemes for computing the taxable base: charge WCT on actual supply, apply abatement for services/labour and charge WCT on materials, or adopt a composition scheme.