Vat query
This query is : Resolved
25 November 2013
My client has business of works contract is they comes under composition vat type
thanks
thanks
25 November 2013
specify the state
25 November 2013
I think except Punjab in all other states composition provision is available for works contract dealers......mjk
27 November 2013
MAHARSAHTRA
03 August 2025
VAT Composition Scheme for Works Contract – Maharashtra (as of 2013):
Yes, under the Maharashtra Value Added Tax Act, 2002, a composition scheme was available for works contract dealers.
📌 Key Features of the Composition Scheme (as of 2013):
Eligibility:
Applicable to dealers executing works contracts such as construction, fabrication, installation, etc.
Dealer must opt for the composition scheme (it’s not automatic).
Tax Rate (Approximate):
Generally, a flat 5% (or lower in specific cases like developers under certain schemes).
The rate varied depending on the type of works contract (e.g., civil works vs. others).
No input tax credit (ITC) was allowed under composition.
Conditions:
Cannot claim set-off on purchases (i.e., no input tax credit).
Must file returns under the composition format.
Once opted, bound to continue for the financial year unless otherwise permitted.
Notified Contracts:
Certain contracts (like those involving government projects or turnkey contracts) had specific provisions.
⚠️ Important:
Since VAT has been replaced by GST from 1 July 2017, this information is historical and relevant only for past assessments or audits.
Let me know if you need:
Copies of the relevant rules from MVAT Act
Transition advice to GST (if this is a retrospective case)
Guidance on GST treatment of works contracts now
Yes, under the Maharashtra Value Added Tax Act, 2002, a composition scheme was available for works contract dealers.
📌 Key Features of the Composition Scheme (as of 2013):
Eligibility:
Applicable to dealers executing works contracts such as construction, fabrication, installation, etc.
Dealer must opt for the composition scheme (it’s not automatic).
Tax Rate (Approximate):
Generally, a flat 5% (or lower in specific cases like developers under certain schemes).
The rate varied depending on the type of works contract (e.g., civil works vs. others).
No input tax credit (ITC) was allowed under composition.
Conditions:
Cannot claim set-off on purchases (i.e., no input tax credit).
Must file returns under the composition format.
Once opted, bound to continue for the financial year unless otherwise permitted.
Notified Contracts:
Certain contracts (like those involving government projects or turnkey contracts) had specific provisions.
⚠️ Important:
Since VAT has been replaced by GST from 1 July 2017, this information is historical and relevant only for past assessments or audits.
Let me know if you need:
Copies of the relevant rules from MVAT Act
Transition advice to GST (if this is a retrospective case)
Guidance on GST treatment of works contracts now
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