Urd purchases - works contract
This query is : Resolved
21 August 2012
Team
We as a construction company, doing some URD purchase like Sand, Bricks and hollow blocks and there are no tax invoices for these meterials. Could you please let me the tax implication on these URD purchases. Payment is being done by A/c payee cheques against vouchers for these vendors. Does these purchases needs any other documents for proof of purchase. please advise.
Thanks
Venkatesh
We as a construction company, doing some URD purchase like Sand, Bricks and hollow blocks and there are no tax invoices for these meterials. Could you please let me the tax implication on these URD purchases. Payment is being done by A/c payee cheques against vouchers for these vendors. Does these purchases needs any other documents for proof of purchase. please advise.
Thanks
Venkatesh
21 August 2012
under vat rules ( subject to your state vat rate list) these items are taxable, so you need biils for these,
21 August 2012
Thanks for your reply. However, as I stated earlier these suppliers are Unregistered dealers and will not be able to provide any biils. What's the solution??Do we need to pay tax on their behalf??
25 August 2012
can someone help me on this one??
02 August 2025
Hey Venkatesh,
Regarding your **URD purchases of materials like sand, bricks, hollow blocks** for your works contract, here’s the usual tax treatment:
---
### 1. **Tax Implication on URD Purchases:**
* Since the suppliers are **unregistered dealers**, they **won't provide VAT invoices**.
* **You, as the purchaser, are liable to pay VAT on such purchases under the URD/reverse charge provisions** of your state VAT law.
* The VAT is payable at the **rate applicable to those goods** (sand, bricks, hollow blocks, etc.) as per your state VAT schedule.
---
### 2. **How to Pay VAT on URD Purchases:**
* Calculate VAT on the purchase amount at the applicable rate.
* Deposit this VAT amount directly with the state tax authorities under URD purchase rules.
* Maintain proper records of these transactions (purchase vouchers, payment proofs like account payee cheques).
---
### 3. **Documents Needed as Proof:**
* Since you cannot get tax invoices from unregistered suppliers, maintain:
* **Kaccha bills or purchase vouchers** issued by the unregistered supplier.
* **Payment evidence** such as account payee cheque copies or bank statements.
* Internal purchase register recording URD purchases.
* These will be your supporting documents in case of tax audit or assessment.
---
### 4. **Input Tax Credit (ITC):**
* You can generally **claim input credit of VAT paid on URD purchases**, which can be adjusted against your output VAT liability.
* Make sure you report URD purchases separately in your VAT return, and claim rebate/input credit accordingly.
---
### Summary:
| Aspect | Action/Details |
| ------------------------------ | ------------------------------------------------- |
| VAT liability on URD purchases | Purchaser to pay VAT at applicable rate |
| Documents required | Kaccha bills + payment proof (cheques, bank stmt) |
| Claiming ITC | Allowed on VAT paid under URD purchase rules |
| Recordkeeping | Maintain proper register & documents |
---
If you want, I can help draft a sample URD purchase voucher format or guide you on the entries in your VAT return. Let me know!
Regarding your **URD purchases of materials like sand, bricks, hollow blocks** for your works contract, here’s the usual tax treatment:
---
### 1. **Tax Implication on URD Purchases:**
* Since the suppliers are **unregistered dealers**, they **won't provide VAT invoices**.
* **You, as the purchaser, are liable to pay VAT on such purchases under the URD/reverse charge provisions** of your state VAT law.
* The VAT is payable at the **rate applicable to those goods** (sand, bricks, hollow blocks, etc.) as per your state VAT schedule.
---
### 2. **How to Pay VAT on URD Purchases:**
* Calculate VAT on the purchase amount at the applicable rate.
* Deposit this VAT amount directly with the state tax authorities under URD purchase rules.
* Maintain proper records of these transactions (purchase vouchers, payment proofs like account payee cheques).
---
### 3. **Documents Needed as Proof:**
* Since you cannot get tax invoices from unregistered suppliers, maintain:
* **Kaccha bills or purchase vouchers** issued by the unregistered supplier.
* **Payment evidence** such as account payee cheque copies or bank statements.
* Internal purchase register recording URD purchases.
* These will be your supporting documents in case of tax audit or assessment.
---
### 4. **Input Tax Credit (ITC):**
* You can generally **claim input credit of VAT paid on URD purchases**, which can be adjusted against your output VAT liability.
* Make sure you report URD purchases separately in your VAT return, and claim rebate/input credit accordingly.
---
### Summary:
| Aspect | Action/Details |
| ------------------------------ | ------------------------------------------------- |
| VAT liability on URD purchases | Purchaser to pay VAT at applicable rate |
| Documents required | Kaccha bills + payment proof (cheques, bank stmt) |
| Claiming ITC | Allowed on VAT paid under URD purchase rules |
| Recordkeeping | Maintain proper register & documents |
---
If you want, I can help draft a sample URD purchase voucher format or guide you on the entries in your VAT return. Let me know!
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