WCT: applicable date for determining rate of WCT

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This query is : Resolved

Mangala (Querist)

18 July 2009 We have raised a part bill no. XIV for Rs. 50 lakhs for works done in Kerala. Date of bill no. XIV is in Feb. 2008 and WCT is 4% then. CLient released 31 lakhs in March 2008 deducting 4% WCT at source. Balance 19 lakhs was released in April 2008, again deducting 4% WCT at source. Actual rate was revised by Govt.to 8% in April 2008. Now, in July 2009, CLient is preparing final bill, and says they are going to deduct WCT @ 8% on the entire 50 lakhs.

Are they correct in applying 8% on entire 5o lakhs? Or should it be applied only on 19 lakhs? Or should they deduct only4% for entire 50 lakhs? What is the correct date for determining applicable rate of WCT?

Bhaskaran Chackrapani Warrier

Bhaskaran Chackrapani Warrier (Expert)

18 July 2009 Awarder is not correct. 8% is applicable only to Rs.19 Lakhs because existing contracts(ie. contract commenced before 31-03-2008) will be liable to tax @ 4% only.
If the awarder is still not convinced try to obtain Form 20 B from your KVAT officer and give to the awarder if u are not opted for compounding.- Means no tax will be deducted.
On the other hand,if you are paying tax at compounded rate obtain Form 4D from your KVAT Officer and submit to the awarder. - Means tax will be deducted @ 3.03%.

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