Work Contract Tax


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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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.

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


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.


Total likes : 1 times

 
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Practising Chartered Accountan

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?

 
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Private


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

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

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


 

 
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(Guest)

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.
"

 
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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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