VAT works contract tax and servicetax WCT

[RAJ KUMAR RAJKUMAR]

Sir,

 

in our factory one of the contractor is constructing the canteen building Building. Factory located in Andhra paradesh. Contract includes Matl+labour.so it will get effected by APVAT wct+Service tax wct.

in what way the bill should be.

suppose bill amount is                                      100

APVAT wct 5% on 70% of the bill                         3.5

Service tax WCT 12.36% on 30%                       3.70

is it correct.

 

 

[YAGAY and SUN]

The Contractor is Charging APVAT @ 5% on the 70% correctly but Service Tax will be charged @ 4.8% on the total contract value.

Please get the bill corrected from the Contractor.

[CS Kushwaha]

Sir,

what % of vat/wct on what % of bil value wiil be chargeable, if the above canteen run in Maharashtra.Service tax will be same as 12.36% on 40% bill value

Accordingly to union Budget 2012 if  Notification No. 15/2012 related to reverse charge mechanism is applicable then 50% service tax to be charge by the contractor and 50% service tax to be deposit  by your good self,  go to the Notification No. 15/2012

[CS Kushwaha]

my query was for Vat ,not for service tax, please suggest for vat only.

[sanjeev bajaj]

Here, I would like to know, when the cost of material and labour is ascertainable, then on what amount the VAT and Service Tax will be chargeable.

if question is only for  VAT then Ok,  service tax and  TDS under WCT  will also applicable on above transaction.

AI Summary

Works contract taxation: allocate contract value between materials and labour to determine VAT and service tax incidence under reverse charge rules.
Taxation of a construction contract requires apportionment of contract value between materials and labour so state VAT/WCT applies to the goods portion and service tax to the services portion; reverse charge or partial reverse charge provisions can reallocate service tax payment obligations between contractor and recipient, and state rules determine the appropriate allocation and withholding duties.