Tds on work contract and wct difference

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This query is : Resolved

Srinivasan Sivarao (Querist)

15 May 2016 Hi,
I would like to know is there any difference between TDS on works contract and WCT. Recently, I issued a contract to contractor. My accounts department deducted 2% TDS on works contract and later further deducted 2% as Works contract tax (WCT). Whether both deductions are applicable for same work contract? Pls clarify.

Also, please clarify whether should we need to deduct labour component in tax invoice to arrive at taxable value of works contract?

If contractor submits tax invoice separately for material component and labour component on the same date, should we need to deduct WCT? Pls clarify.

kalpesh bafana

kalpesh bafana (Expert)

16 May 2016 Both TDS are different, one for Regular Income Tax & other for VAT (Sales Tax) i.e to be set off or claim in VAT payable.
The second TDS on VAT need not to deduct if separate Labour Bill is issued with a separate work order for such works & also the separate Material Bill for that.

Rupesh Jain

Rupesh Jain (Expert)

16 May 2016 WCT AND TDS is different
wct deducted under the sale tax act of the state VAT Act and TDS deduct under the income tax act.
u/s 194C. so not confused for that.

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