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Discussion > VAT >

Work Contract Tax

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[ Scorecard : 13285]
Posted On 18 June 2008 at 18:11 Report Abuse

What is concept of  'Work Contract Tax' (WCT) which is levied @ 3% on the amount of bill paid to any contrcator who provide material and services. (Rajasthan only)

For Example if a contract given to a Carpenter for making furniture along with material.

The Carpenter make combine bill for service & material. Deduction made for Contract TDS (U/s 194 C) and WCT @ 3% is also attarct.

Please advice that this WCT are attract on all  type of Contracts with material or applicable for limited cases?

 


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CA. Atindra A. Prabhu Bhatikar
practising CA

[ Scorecard : 68]
Posted On 19 June 2008 at 15:38

In the sale of goods, the things produced or manufactured as a whole is absolute property of maker when it comes into existence and then he transfers it to the buyer. In works contract, the things produced as a whole is never absolute property of maker. Even though material used in works contract might hav been his absolute property. The article produced as a whole directly becomes property of buyer without first becoming property of maker. The contract is primarily, the contract of work, labour and materials are supplied in execution of such contract.

In a WCT, the tax is goods involved in execution of works contract and not on works contract as such. Say in construction, ABC builders and promoters have given the contract of building to Mr. A, then has to charge ABC builders WCT on the material involved in const. on which VAT is payable, ie cement, steel,sand etc. This means all the purchases have to be vattable.

All works contract are not taxable.





Supriya
Engineer

[ Scorecard : 0]
Posted On 20 June 2008 at 17:09

Hi, Mr. A.A.Prabhu Bhatikar, Can you please tell me "CST & WCT" same or different & its applicability????



Ashish Ashra
Chartered Accountant

[ Scorecard : 50]
Posted On 01 July 2008 at 15:14

WCT is a part of VAT. WCT is in VAT like TDS is in Income Tax Act. WCT was the name given by Sales Tax Act but VAT Act name it as TDS. As per DVAT, it is to be levied @ 2% but there are companies who charge more than 2%. Every state may be having different rates just check it in VAT Act of Rajasthan

In the Act you will find a topic of "Tax Deduction At Source" explaining the whole provision.

CST is altogether a different thing. CST is a tax whereas WCT is TDS for those contractors who are liable for Tax deduction in VAT Act.

I think you got that.




Shahs
Practising Chartered Accountan

[ Scorecard : 44]
Posted On 01 July 2008 at 16:37

An exporter of goods has some work done on labour job. The labour job contracter levies works comtract tax. Can the exporter submit Form H so that no WCT is levied?




Sanjeev Kumar
Private

[ Scorecard : 832]
Posted On 01 July 2008 at 18:20

pure labour contracts are not covered VAT, hence no need to charge WCT under VAT as well as form H




mahendra
Job

[ Scorecard : 21]
Posted On 26 September 2008 at 13:05

Please give me the details of  WCT under  MP VAT  (Processor, Rate of tax, Return etc.)




mahendra
Job

[ Scorecard : 21]
Posted On 13 October 2008 at 16:02

Originally posted by :Guest
" Please give me the details of  WCT under  MP VAT  (Processor, Rate of tax, Return etc.) "


 




(Guest)
Posted On 29 November 2008 at 12:28

Originally posted by :Guest
" WCT is a part of VAT. WCT is in VAT like TDS is in Income Tax Act. WCT was the name given by Sales Tax Act but VAT Act name it as TDS. As per DVAT, it is to be levied @ 2% but there are companies who charge more than 2%. Every state may be having different rates just check it in VAT Act of Rajasthan
In the Act you will find a topic of "Tax Deduction At Source" explaining the whole provision.
CST is altogether a different thing. CST is a tax whereas WCT is TDS for those contractors who are liable for Tax deduction in VAT Act.
I think you got that.
"




Sabiha Dabir
Asst.manager

[ Scorecard : 25]
Posted On 05 November 2010 at 11:41

I want to know what is WCT? and whether it should be charged on total bill amount including VAT or only on basic bill amount.



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