How to make invoices of a works contractor?

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This query is : Resolved

narender (Querist)

27 April 2013 My query is that if in the contract agreement all the material will be of contractor. And when contractor purchasing required material then, Whose name should be purchase invoice, whether contractor's name or contractee's name?

CA Vikas Acharya

CA Vikas Acharya (Expert)

28 April 2013 contractor can purchase in his own name if it is a composite contract.
if material in his own name, composite contract, charging lumpsum amount. its works contract, take abatement/valuation as per rule 2A of STVR

though if he wants to disclose the amount of material to the contractee and will charge reimbursement for the materifal and separate amount for his service, then in that case take bill in name of contractee because in that ways contractor will become pure agent as per 5(2) STVR. AND service tax will be paid on only service part, will be a labor contract

so its depends on the contract terms.

Message likes : 1 times

narender

narender (Querist)

28 April 2013 I'm thankful for your suggestion. I'm also want to ask that, if the contractor purchasing goods with his name and issue a new invoice to the party after charging profit on material. Is this right? if it is the composite contract and the material will be of contractor.

CA Vikas Acharya

CA Vikas Acharya (Expert)

28 April 2013 ofcourse purchase material in contractor's name and then raise a invoice in which total value of work contract is written.
only material can not be sold on profit as it will constitute 'sale'.

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