Jouranal entry for composition tax on work contracts

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Anoop N S (Querist)
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16 November 2011 Dear All ,
We are having a client doing construction contracts of various banks, in these regard , against our bill banks are deducting KVAT(karnataka VAT)4% ( as per composition )and later on they are giving the cheque to us in the name of concerned LVO, How to Account these transactions. Please Help me in these case.

prasad

prasad (Expert)
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16 November 2011 one thing be clarified. Who is LVO.
me from Maharatshtra. May be I am not getting your terminology.

Anoop N S

Anoop N S (Querist)
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16 November 2011 LVO means Local Vat Office

Anoop N S

Anoop N S (Querist)
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16 November 2011 let us take as Example
sales made to Bank 2,00,000.
Amount passed by the Bank1,90,000.
Retention Amount
(5% of 1.9lacks) ie., 9500.
Works contract wat
deducted by the Bank(4%) 7600.
Tds Deducted 2.26% 4294.
Amount recived 1,68,606
Points
1.. (retention amount should be returned after the specified period mentioned in the agreement)
2. Bank will also give account payee cheque amounting to 7600 to us by the name of the concerned LVO immediatly after the payment of bill. we will collect that cheque and submit the cheque to the vat office along with monthly return..
Hope it is clear Now..

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