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Avaialable setoff and payment of vat for a work contract


Querist : Anonymous (Querist) 29 August 2012

In Maharashtra, a contractor has taken a contract of pipe line from river to factory for 3crore.

During 10-11 only earth work was done, no property in any material is transferred. Expenses incur against earth work of Rs. 70 Lacs. WCT TDS was made on advances by contractee of Rs. 2,00,000/-.

During 11-12, work done involves earth and labor work of Rs. 80 Lacks and goods of 10 lacks is used in contract, against which running bill of Rs. 1 crore is received with TDS under WTC at Rs. 2 lacks.
During 12-13 remaining work is completed, incurring expenses for Labor work of Rs. 30 lacs and for material Rs. 10 lacs expensed.

Work is completed within three years.

Assessee has opted to pay VAT following rule 58. In first year there is no transfer of goods hence tax payable will be NIL and will have to claim refund, but in subsequent years material is used the property in which gets transfer.

Kindly advice how to discharge liability with calculation.
For contact kindly give mob. No. or Mail address.

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