Vat on works contract
This query is : Resolved
Querist : Anonymous
Querist :
Anonymous
(Querist)
28 August 2013
i am a dealer in karnataka registered under cot scheme for civil works contract. as per our friends instructions and service tax official instruction i have raised my contract bill 60:40 ( 60% for material and 40% for service).accordingly i have collected service tax and since i am cot dealer i have not collected vat. However on 60% of the invoice value i have paid vat. now one on vat audit official asking to pay on 40% of the value also. is it liable to pay. kindly guide me in this regard.
CA. RAVIKUMAR
(Expert)
29 August 2013
Dear Sir,
For COT scheme especially for Works contract computation of VAT should be as per below mentioned method.
gross amount received: *****
Less: Deductions
a) Land cost ****
b) payment to registered sub contractor *****
(c)Interstate purchases ****
Arrive the amount taxable under works contract @4% ****
Next process is to add the tax on On interstate purchases at local rate
Ratio is not the criteria for determining the taxable amount.
For COT scheme especially for Works contract computation of VAT should be as per below mentioned method.
gross amount received: *****
Less: Deductions
a) Land cost ****
b) payment to registered sub contractor *****
(c)Interstate purchases ****
Arrive the amount taxable under works contract @4% ****
Next process is to add the tax on On interstate purchases at local rate
Ratio is not the criteria for determining the taxable amount.
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