Tax liability of works contract

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This query is : Resolved

S H S NARASIMHA RAO (Querist)

17 April 2016 I know a client.....who received Rs.38070/-(excluding vat@14.5%) work contract from a company...
He Purchased Rs.10000/-(including vat@5%) material for this order and
incurred Labour Charges Rs.12500/- and other miscellaneous expenses of Rs.5000/-
He belongs to Andhra Pradesh....He is a registered dealer of VAT.
Can anyone help me what will be the Output Tax and Tax payable by this client

Murtaza I Bhagat

Murtaza I Bhagat (Expert)

17 April 2016 You have to subtract charges and expense from gross receipt and divide your taxable value into percentage of vat on goods which is used in your work contract and you need to find basic and out value will total to taxable value. Now you have to calculate vat payable by set off out put against input vat.
i.e 38070-12500-5000=20570 taxable value
purchase goods vat rate is 5% so taxable basic value is 19590 + Output VAT is 980 = 20570
Now purchase taxable value@ 5% taxable basic value is 9524 + Input vat is 476 = 10000
Computation Output VAT 980 - Input VAT 476 = 504 VAT Payable

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