Works contract tax & labour cess

 

(Querist) 22 November 2013

Our Company has awarded contracts for construction of Godowns in AP & UP.Both contracts are exclusive of taxes which are to be borne by the contractee.

Now for AP Work the Contractor is raising bills as follows:

Work Done Rs.1,00,000/-
Add: WCT @ 5% Rs. 5,000/-
Add: Labour Cess @1% Rs. 1,000/-
Total Rs. 1,06,000/-


My Queries:

1. Is there any exemption from VAT/WCT as the company is constructing agricultural warehouse(Priority Sector) which will b leased to FCI for storage of foodgrains against lease rentals?
2. What is the rate of WCT if the contractor is under Regular scheme and under Composite Scheme.

3. If the above RA bill is correct then we shud make the following deductions from the amount Payable:

Amount payable Rs.1,06,000/-
Less: I.T. TDS @ 2% Rs. 2,000/-
Less: WCT TDS @ 4% 0f 70%
(i.e. 2.8% of work done) Rs. 2,800/-

Net Amount payable Rs.1,01,200/-

4. What is the WCT TDS rate in AP in case of construction contracts with non govt entities? Is it 5%of 70%i.e 3.5% of work done or is it 2.8% as calculated above?

5. If a contractor is under composite scheme can he still get the credit of WCT TDS?

6. If the contractor is under composite scheme can he charge WCT on the RA bills raised on us?

Please clarify

Regards,

Pinky chowbey




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