WCT on interstate sale !

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Manish Doneria (Querist)
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20 September 2008 We have manufactured and supplied acoustic enclosures for DG sets from Agra (U.P) to Bharatpur (Raj.) worth Rs.11,50,000 only on 30 July 2008 charging 2% CST against Form-C.

Now the buyer want to deduct 3% Works Contract Tax on the whole value from my payment.

My question is:
1.Whether is the deduction legally correct?
2.If yes than is there any procedure where we can claim any refund for the same?

Thanks in advance!

S.Srinivasaraghavan

S.Srinivasaraghavan (Expert)
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02 October 2008 1. If the manufacture and sale of DG sets is using your own material, your own specification and the order is for Genset as a whole which is your product, then it is sale of Gen set and not works contract. If the purchaser supplies his material and ask you to add some of your material and assemble gen set for him as per his specifications then it will be works contract. You have to therefore clarify the nature of transaction.

Manish Doneria

Manish Doneria (Querist)
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02 October 2008 Dear Mr.S.Srinivasaraghavan,
Thanks for the reply.In the said transaction we have supplied only the acoustic enclosures which were fitted on the existing DG sets.

We had supplied ready to use acoustic enclosures thus installation not required.

S.Srinivasaraghavan

S.Srinivasaraghavan (Expert)
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03 October 2008 If you have supplied accoustic enclosures
to be fitted on you will have difficulty in proving that it is not works contract.

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