Value consideration at trhe time of wct

[Guest]

If the work order value of any party is more than 1 crore rupees than we deduct 2% as Work contract tax. now my question is that while deducting 2% WCT which value we have to consider (basic order value) or (basic vlaue + service tax + vat).

[Madhukar N Hiregange]

The value of service tax should not be included in the value for VAT and vice versa since the activity is simultaneous i.e. skill/ labour is provdied along with materials.

[Guest]

It is too early to comment. Rules to be framed and notified at appropriate time for proposed composition scheme. Till than we should wait and watch.

[Madhukar N Hiregange]

Still to be notified and there maybe prescribed methods toarrive at the same. Pl wait for the same.

AI Summary

Clarification Sought on Work Contract Tax Calculation for Orders Over One Crore: Include or Exclude Service Tax and VAT? A query was raised regarding the calculation of Work Contract Tax (WCT) when the work order value exceeds one crore rupees, specifically whether to consider the basic order value alone or include service tax and VAT. One respondent advised excluding service tax from the VAT calculation, as the activities occur simultaneously. Another mentioned that it was premature to determine the rules, suggesting waiting for official guidelines. A further response reiterated the need to wait for notification of prescribed methods.