Which Taxes are Applicable for Contracts pls suggest

[Asked by Guest]

We are a Contractors & Fabricators of Aluminium & Steel - Windows/ Doors/ Partitions/ Ceiling/ Structural Glazing/ Cladding work etc. We Purchase a Material (i.e.: Aluminium/ Glass/ Plywood/ Hardware/ ACP, etc.) from market & Also taking a service of Powder Coating / Anodizing on Aluminium or Steel from outside service providers & then we fabricates all of above & also do a installation (fixing) on site. Our work Criterial includes are as follows: MATERIAL: Material (eg.: Aluminium, Steel, Glass, Ply, ACP Panel, Hardware, etc.) POWDER COATING OR ANODIZING PROCESS: (done from outside processors) LABOUR: (To be paid to Labours for making & installation on site) TRANSPORTATION CHARGES: (Paid to Tempo/ Truck/ Taxi/ Transporter for delivering of material on site) OVERHEADS: (Rent paid for accomodation nr. site, Travelling Charges for Labours, Management, etc.) PROFIT:  So while preparing an Tax Invoice Which Taxes are Applicable & How many Percentges. VAT/ CST/ ST/ WC VAT --- ? From Our Clients, 1 Client is a Building Contractor and they do a various projects for their clients. Recently we have received a Work order from them and they told us to charge a taxes as follows: on 67% of Total Bill Value - M VAT @ 12.5% on 33% of Total Bill Value - ST @ 12.36% will be applicable. Is it perfect or not acceptable .. ? Pls Suggest specially in our case. Thank you,

[Rahul Sharma]

Jatin, your work comes under WCT( Work Contract Tax) you have to see your slabs as per my information it is 70% that means State Vat on 70% & STCC@ 12.36% on 33%. Both invoices are separate as taxes are of State & Center.

Rahul

AI Summary

Work contract tax allocation: VAT on material-heavy component and service tax on service component, invoiced separately.
Allocation of indirect taxes for aluminium/steel contracting requires apportioning contract value between the goods/materials component (subject to State VAT/Work Contract Tax) and the service/works component (subject to Service Tax). Industry practice treats the larger share as state-taxable and the balance as centrally taxable; separate invoices for State and Central taxes are recommended. Taxable bases should reflect the constituent elements of the contract-materials, outsourced processing, labour, transport, overheads and profit-under applicable apportionment rules.