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Works contract tax in karnataka from 1.04.12

This query is : Resolved 

07 April 2012

What is the Composite Vat on Construction.

We are a Construction company we need to execute a civil construction project. Is the new Rate 5% or 4 %. As per Works Contract tax.

What is the Service tax rate if we are paying Composite tax. Is it 4.18 % or 4.8 % form 01.042012.

C A S.S.Agarwal, M.Com.,LL.B, (Expert)
07 April 2012

think there is no change in the rate of last year. Here is the major changes
The changes in the tax proposals are effective from 1
April, 2011. However
Government Notifications are awaited.
 Commercial Taxes
Value Added Tax – reliefs
 Annual turnover limit for compulsory audit of accounts of dealers increased from
Rs.60 lakhs to Rs.1crore.
 Increase in the rate of interest for delay in payment of tax from 15 % per annum
to 18 % per annum.
 Reduction in the time limit for taking up assessment and re‐assessment from 5
years to 4 years.
 Time limit for taking up assessment and re‐assessment for dealers has been
reduced from 5 years to 4 years.
 Increase in the period of validity of stay orders of the Appellate Joint
Commissioners regarding disputed tax from 120 days to 240 days.
Revision of VAT rates
 VAT rate on good currently ta xable at 13.5% increased to 14%.
 Increase in the VAT rate on jewellery and articles of gold and other noble metals,
precious and semi‐precious stones from 1% to 2%.
 Luxury Tax 
The provision has been made for payment of composition amounts in lieu of regular
tax b y home‐stay units.
 Stamps and Registration:
 Relief in stamp duty and registration fee payable on documents executed in
connection with the Tourism Policy of the state, the non‐agricultural loans
advanced to the joint liability groups by the scheduled banks and other
financial institutions approved in this behalf and the allotment of developed
lands to the farmers or the purchase of lands by the farmers out of the compensation amount paid to them, when their lands are acquired for public
 Stamp duty of Rs. 10 payable on the documents presented before the notary
public for attestation exempted.
 Stamp duty reduced from 1 per cent to 0.1 per cent, subject to a maximum of
Rs.20,000 payable on agreement for sale, wherein there is no delivery of
possession of property. When a reference is made in such agreement for
sale, regarding Power of Attorney given to the purchaser authorizing him to
sell the property, then such agreement will be considered as Agreement for
Sale and stamp duty will be levied at 6 per cent (conveyance rate).
 The prevailing superfluous and ambiguous provisions relating to Joint
Development Agreement (JDA) and Power of Attorney (POA) for Joint
Development, in the Karnataka Stamp Act, to be omitted.
 Stamp duty to be reduced from 3 per cent to 2 per cent in respect of the
transfer of property.
 Stamp duty to be increased from 0.7 per cent to 1 per cent on the transfer of
shares, involved in the process of merger and demerger of companies.
 Provision for payment of consolidated stamp duty on brokers’ notes,
insurance policy bonds and receipts.
 A fixed stamp duty of Rs. 50 levied on Powers of Attorney e xecuted by
principals or clients in favour of agents or brokers for operating trading and
Demat accounts in respect of capital market issues and other related issues.
 A fi xed stamp duty of Rs.1000 levied for trust constituted exclusively for the
public, religious and charitable purposes or for trust constituted for the
purpose of management and custody of the properties and where there is no
transfer or disposition of property in any way.
 Stamp duty at 6 per cent levied on trusts, other than public, religious and
charitable trust, wherein there is a transfer or disposition of property in any
way from the owner of the property to a trust, from one trust to another trust
or trustee or beneficiary or from trustee to trust or trustee or beneficiary.
 Motor Vehicles Tax
 The cess on Motor Vehicle Tax has been increased from 10% to 11%

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