Construction Work

This query is : Resolved

Bhargav (Querist)
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17 December 2008 Hello,
We are a Construction Company building
townships.

There is an agreement between two of our
group of company where Company A is under
obligation to estblish the Infrastructure.

My query is that How Company A should
raise bills for Roads, Water-supply
networks, electric network etc.???

As both Material & Labour are used, how
we should calculate VAT on each bill?

Do we require to show VAT on each bill
separately? or we can give cum-vat bill?

At the time of filing of return, how
we should show?

One more point is that we have applied
for VAT Tin and we have started purchasing
material with TAX INVOICE. Hope it wont
take away our right for input credit.

Plz suggest in details.

Bhargav

CA Tilak Raj Sharma

CA Tilak Raj Sharma (Expert)
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17 December 2008 VAT is applicable on material not on the labour charges. Service tax is applicable on labour charges. You need to show VAT on all bills, however you can also isse bills inclusive of VAT.

Bhargav

Bhargav (Querist)
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17 December 2008 Sir, some more questions:

The Company B does nt have service tax
number. This company hires labours on
contract and those contractors dont
charge service tax.
By the way,Company B deducts tax on the
contractor payment.

Plz let us know how VAT & Service tax on
ths should be calculated?

bhargav

Bhargav

Bhargav (Querist)
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17 December 2008 If the bills are issued Inclusive of VAT, how the other party can get the Input Credit?