Claiming wct tds deducted by other state parties
This query is : Resolved
10 February 2011
Dear Sir,
We made sales to party in andhra pradesh which was originally a transaction under cst but later on that party did not provided us C form. we paid the taxes in full @ 12.5% & 4% as applicable in maharshtra state. since also did the application part oms party deducted WCT TDS from our bills. so we while paying the VAT we claimed those wct tds in our returns, now the sales tax officer wants to disaalow the same stating that the same was deducted by other state and hence its a revenue loss to maharashtra state so we cannot cliam it in our return.
we are at loss from both the sides. neither the party paid us full tax. he didnt gave c form. and later on deducted wct tds from our bill which now is being disaalowed by sales tax officer, which will again bring a tax liabilty of that wct tds amount that we have claimed.
now my question is : the tax if any deducted by an oms party, cant it be claimed by us?
We made sales to party in andhra pradesh which was originally a transaction under cst but later on that party did not provided us C form. we paid the taxes in full @ 12.5% & 4% as applicable in maharshtra state. since also did the application part oms party deducted WCT TDS from our bills. so we while paying the VAT we claimed those wct tds in our returns, now the sales tax officer wants to disaalow the same stating that the same was deducted by other state and hence its a revenue loss to maharashtra state so we cannot cliam it in our return.
we are at loss from both the sides. neither the party paid us full tax. he didnt gave c form. and later on deducted wct tds from our bill which now is being disaalowed by sales tax officer, which will again bring a tax liabilty of that wct tds amount that we have claimed.
now my question is : the tax if any deducted by an oms party, cant it be claimed by us?
11 February 2011
Further clarification:
OMS party has deducted TDS on works contract under their VAT Act. which shouldnt have been deducted by that party as CST Act doesnt requires deduction of tax.
My question here is, will the assessee be made to pay double tax. i understand there is revenue loss to the state but its not loss to government taken as whole then why should assessee suffer.
OMS party has deducted TDS on works contract under their VAT Act. which shouldnt have been deducted by that party as CST Act doesnt requires deduction of tax.
My question here is, will the assessee be made to pay double tax. i understand there is revenue loss to the state but its not loss to government taken as whole then why should assessee suffer.
19 July 2024
It seems like you are facing a complex situation involving CST (Central Sales Tax), VAT (Value Added Tax), C Form, and WCT (Works Contract Tax) TDS deduction across states. Here are some clarifications and steps you can consider:
### Understanding the Issues:
1. **C Form Non-availability:**
- The buyer in Andhra Pradesh did not provide you with the required C Form, which would have allowed you to charge a lower CST rate (against Form C) instead of the full CST rate.
- Due to this, you have paid CST at higher rates (12.5% and 4% as applicable in Maharashtra).
2. **WCT TDS Deduction:**
- The buyer in Andhra Pradesh deducted WCT TDS from your bills. This deduction is under their state's VAT Act, which may not align with the CST provisions.
3. **Disallowance by Sales Tax Officer:**
- The Sales Tax Officer is disallowing your claim of WCT TDS deduction, citing revenue loss to Maharashtra state.
### Clarifications and Options:
- **C Form Issue:** Without the C Form from the buyer, you are liable to pay CST at full rates. This creates a financial burden since you cannot benefit from the concessional rate.
- **WCT TDS Deduction:**
- The deduction of WCT TDS by the buyer in Andhra Pradesh is governed by their state's VAT Act for Works Contract transactions. However, this deduction should ideally not apply to interstate transactions under CST.
- **Tax Liability Concern:**
- If the Sales Tax Officer disallows your claim of WCT TDS deduction, you could face a potential tax liability in Maharashtra for the amount claimed.
### Steps to Consider:
1. **Review Documentation:**
- Gather all relevant documents including invoices, communication with the buyer, proof of WCT TDS deduction, and correspondence with the Sales Tax Department.
2. **Consult a Tax Expert:**
- Seek advice from a tax consultant or chartered accountant who is well-versed in interstate transactions and CST/VAT laws. They can provide guidance on how to proceed and argue your case effectively.
3. **Challenge Disallowance:**
- If the Sales Tax Officer disallows your claim, you may need to challenge this decision through an appeal process. Present your case with supporting documentation and legal arguments.
4. **Coordinate with Buyer:**
- Communicate with the buyer in Andhra Pradesh to understand why WCT TDS was deducted and seek their cooperation in resolving the issue. They may need to rectify their TDS deduction approach if it was not appropriate under CST rules.
5. **Compliance and Future Transactions:**
- Ensure future transactions are well-documented and comply with CST and VAT regulations. Promptly address any discrepancies in C Form submission or TDS deductions.
### Conclusion:
The situation you are facing involves intricate interstate tax issues. It's crucial to approach this with comprehensive documentation and professional advice to mitigate potential double taxation and ensure compliance with relevant tax laws. Engaging a tax expert will be essential in navigating the complexities and resolving the matter in your favor.
### Understanding the Issues:
1. **C Form Non-availability:**
- The buyer in Andhra Pradesh did not provide you with the required C Form, which would have allowed you to charge a lower CST rate (against Form C) instead of the full CST rate.
- Due to this, you have paid CST at higher rates (12.5% and 4% as applicable in Maharashtra).
2. **WCT TDS Deduction:**
- The buyer in Andhra Pradesh deducted WCT TDS from your bills. This deduction is under their state's VAT Act, which may not align with the CST provisions.
3. **Disallowance by Sales Tax Officer:**
- The Sales Tax Officer is disallowing your claim of WCT TDS deduction, citing revenue loss to Maharashtra state.
### Clarifications and Options:
- **C Form Issue:** Without the C Form from the buyer, you are liable to pay CST at full rates. This creates a financial burden since you cannot benefit from the concessional rate.
- **WCT TDS Deduction:**
- The deduction of WCT TDS by the buyer in Andhra Pradesh is governed by their state's VAT Act for Works Contract transactions. However, this deduction should ideally not apply to interstate transactions under CST.
- **Tax Liability Concern:**
- If the Sales Tax Officer disallows your claim of WCT TDS deduction, you could face a potential tax liability in Maharashtra for the amount claimed.
### Steps to Consider:
1. **Review Documentation:**
- Gather all relevant documents including invoices, communication with the buyer, proof of WCT TDS deduction, and correspondence with the Sales Tax Department.
2. **Consult a Tax Expert:**
- Seek advice from a tax consultant or chartered accountant who is well-versed in interstate transactions and CST/VAT laws. They can provide guidance on how to proceed and argue your case effectively.
3. **Challenge Disallowance:**
- If the Sales Tax Officer disallows your claim, you may need to challenge this decision through an appeal process. Present your case with supporting documentation and legal arguments.
4. **Coordinate with Buyer:**
- Communicate with the buyer in Andhra Pradesh to understand why WCT TDS was deducted and seek their cooperation in resolving the issue. They may need to rectify their TDS deduction approach if it was not appropriate under CST rules.
5. **Compliance and Future Transactions:**
- Ensure future transactions are well-documented and comply with CST and VAT regulations. Promptly address any discrepancies in C Form submission or TDS deductions.
### Conclusion:
The situation you are facing involves intricate interstate tax issues. It's crucial to approach this with comprehensive documentation and professional advice to mitigate potential double taxation and ensure compliance with relevant tax laws. Engaging a tax expert will be essential in navigating the complexities and resolving the matter in your favor.
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