Dear Madam / Sir
I would like to add some more points in this regard as under:
For composite dealers executing works contract as per notification No.FD 116 CSL 2006(13), Bangalore, dated 31-3-2006 the rate of tax payable is 4% on the total consideration for the works contract executed.
From 1-4-2006 section 15 [composite dealers] has been amemded to permit the composite dealers to purchase goods from interstate subjection condition that, such dealers should pay tax under section 4 [i.e., if such goods falling under the rate of 4% should pay at 4% or if such goods falling under the rate of 12.5% should pay at 12.5% under the KVAT Act,] this tax should be payable on the value of interstate purchases without adding profit
For the balance turnover [i.e., total consideration - interstate purchases] at the rate of 4%.
If you are executing a works contract for Govt. Company, as per section 9-A, TDS is applicable. Govt. Company has to deduct the tax at source and remit to the Department. Tax to be deductible under this section is equal to the tax payable by you.
in this situation you need to compute an hypothetical if actual not possible example working out the approximate tax payable on payments receivable by you.
based on this i would like to conclude here that, the question of bifurcation of material and labour does not arises for the purpose of TDS. It depends on your working to be given to your customer.