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

[Guest]

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.

[Guest]

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.