Applicability of vat

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mohd arbaz khan (Querist)
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14 November 2013 Respected Sir/Madam,

if Mr.A is a resident of maharashtra state & he is a works contractor.
his client Mr.B is in tamilnadu and mr.A is performing works contract for him in tamil nadu.
my querry is whether VAT of tamilnadu will be applicable or VAT of maharashtra will be applicable for Mr.A.
thank you.. 1

please reply

mohd arbaz khan

mohd arbaz khan (Querist)
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04 December 2013 please throw some light on my querry...

mohd arbaz khan

mohd arbaz khan (Querist)
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04 December 2013 please throw some light on my querry...

Aashok Kumar Sharma

Aashok Kumar Sharma (Expert)
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14 July 2024 In the scenario you've described where Mr. A, a works contractor resident in Maharashtra, is performing a works contract for Mr. B in Tamil Nadu, the applicability of VAT (or GST, as per current regulations) depends on the place of supply rules.

Here’s the breakdown:

1. **Place of Supply for Works Contract Services:**
- Works contract services are generally deemed to be supplied at the location where the immovable property (or part thereof) is situated, where the services are performed.
- Since Mr. A is performing the works contract in Tamil Nadu for Mr. B, the place of supply is Tamil Nadu.

2. **Applicability of VAT/GST:**
- **Tamil Nadu VAT/GST:** As the works contract services are performed in Tamil Nadu, Tamil Nadu VAT (or GST under the current regime) will be applicable on the transaction.
- **Maharashtra VAT/GST:** Maharashtra VAT (or GST) would not be applicable in this case, as the place of supply rules determine that tax jurisdiction lies with Tamil Nadu where the services are rendered.

3. **Registration and Compliance:**
- Mr. A may need to register for GST in Tamil Nadu if the aggregate turnover of his taxable supplies exceeds the threshold limit specified by the GST laws.
- Compliance such as invoicing, filing of returns, and payment of GST will need to be done in accordance with Tamil Nadu GST regulations.

In conclusion, for the works contract services provided by Mr. A to Mr. B in Tamil Nadu, Tamil Nadu VAT (or GST) will be applicable, and Mr. A would need to comply with the GST laws of Tamil Nadu.

For precise guidance tailored to Mr. A’s specific circumstances and to ensure compliance with the current GST regulations, it is advisable to consult with a tax advisor or GST consultant.

Best regards,

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