Treatment of labour charges

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

07 April 2012 While filing VAT return, does income from labour needs to be shown anywhere in the return???? This labour is in addition to the goods sold while servicing an automobile and thus included in the sales bill.

CA CS Pawan Jajoo

CA CS Pawan Jajoo (Expert)
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07 April 2012 Yes , you can show it in non taxable labour charges in MVAT Return.

Murtaza I Bhagat

Murtaza I Bhagat (Expert)
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07 April 2012 yes agreed, it will show in gross value and then less as non taxable item net will be taxable item

Querist : Anonymous

Querist : Anonymous (Querist)

09 April 2012 can anyone please tell me the treatment as per west bengal vat return ??

Aashok Kumar Sharma online

Aashok Kumar Sharma online

(Expert)
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02 August 2025 Regarding **treatment of labour charges in VAT return** (including for West Bengal VAT):

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### General treatment of labour charges in VAT returns:

1. **If labour charges are part of the invoice along with goods sold:**

* Total invoice value (goods + labour) is reported as **gross turnover** in the VAT return.
* Labour charges (which are non-taxable or exempt under VAT law) are **shown separately as non-taxable turnover or exempt turnover** in the return.
* This means the taxable turnover is the **total invoice value minus labour charges**.
* VAT is paid only on the taxable value (goods portion).

2. **Labour charges themselves are generally non-taxable under VAT laws** (except in some states where it may be differently treated).

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### Specific to West Bengal VAT Return:

* In West Bengal VAT return (Form VAT-400), there is a separate column or schedule to disclose **non-taxable turnover** which includes labour charges.
* You should:

* Show the **total sales including labour charges** under gross turnover.
* Declare **labour charges as non-taxable turnover** under the appropriate column.
* The net taxable turnover will be the gross turnover minus labour charges.
* This way, labour charges do not attract VAT, but are transparently disclosed.

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### Summary:

| Description | Treatment in VAT Return |
| ------------------------------ | ------------------------------------------------- |
| Labour charges (non-taxable) | Shown separately as non-taxable turnover |
| Total invoice (goods + labour) | Shown under gross turnover |
| VAT payable | Calculated on taxable turnover (excluding labour) |

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If you want, I can help you with a sample format or how to fill the West Bengal VAT return to accommodate labour charges. Would you like that?

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