Save Rs 588 on a 2-Year Ad-Free CAclubindia Pro Membership. Subscribe Now!

Wct

Save Share

Join Us Follow Us Add as Source

This query is : Resolved

Report Query Ask a Query

Querist : Anonymous

Querist : Anonymous (Querist)

16 August 2012 WHAT IS THE CONCEPT OF WCT ? HOW IT IS TO BE COMPUTED ? HOW IS IT RELATED TO VAT & SERVICE TAX ?

RENGARAJ R.K

RENGARAJ R.K (Expert)

16 August 2012 After 42nd Amendment in the Indian constitution, Works Contract was included for taxation purpose both by Central and State. Since works contract is a composite of both material and labour, the states have been given power to collect tax as material is involved as goods. Later, the Central Government also brought this under service tax levy. But they cannot touch value of goods involved in the works contract therefore they levy only on labour charges. This is the concept.

Vat is computed either on composition scheme or segregation value, as per the STATE VAT Act.

Service tax is computed on the turnover after deducting the actual material cost, as shown in the VAT return, or 40% of the total amount charged.

You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now