Vat

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This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

22 July 2014 Party A is a govt organisation. Party B(private party) has done painting and repairing work for party A. Party B raises bii as
Material 2100
Total bill 4490
Now Party A made payment to Party B after deducting TDS and Vat
VAT 4% 180/-
TDS 1% 45/-
Party B 4265/-(4490-180-45)
My question is
1) Is it the right way of deducting vat? Whether party A is liable to deduct vat,If party B is not registered under VAT (turnover<5 lakhs)? Party A said he is deducting vat on behalf of Party B and deposit vat in govt a/c
2) Whether Tds is to be deducted and on what amount?

CA UMESH DULAL

CA UMESH DULAL (Expert)

22 July 2014 Liability to deduct TDS (VAT) is cast on contractee and for minimum amount not liable to deduct TDS, you have check respective state's VAT law/rule.

As far as TDS (income Tax) is concerned, no tds is liable to be deducted if contract amount during the year is less than 75000 or payment is made not more than 35000 in single payment. TDS is to be deducted on contract value including VAT

Vishnu Saboo

Vishnu Saboo (Expert)

22 July 2014 i feel both taxes deduction are wrong.

Querist : Anonymous

Querist : Anonymous (Querist)

22 July 2014 Actully sir the amount has been exceeded from 75000 p a so now they deduct tds on every small amount bill.
sir i m confused about VAT. i dont think this is the right way of deducting vat.
Sir please tell what is the right way of deducting vat and tds
whether there is service tax liability?

Querist : Anonymous

Querist : Anonymous (Querist)