One of my client got a contract of Rs. 100 from a government department for supply & installation of machinery. As per the contract Rs. 80 are for supply of machinery and Rs. 20 are for labor.
Now the department is saying that wct @6% will be deducted on Rs. 100. Our point is that since the contract is in two parts..one for supply and one for labor,therefore, wct not applicable.
07 November 2014
What is split is the activity and NOT the contract. The contract is one, as a whole. The crucial test would be are you able to SELECT any one of the two as per your WISH?
I think department is correct in calling it a works contract.