Work cantract

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Swapna Racha (Querist)

28 March 2012 Hi,

when the work cantract is applicable please give some example also and why the tax rate is applicable 8% on such work since, 8% rate is not pertain to any shedule also.

Thanks in advance

Bhaskaran Chackrapani Warrier

Bhaskaran Chackrapani Warrier (Expert)

28 March 2012 The works contract is deemed sale, which involves the transfer of property in goods(whether as goods or in some other form) involved in the execution of a works contract. Under State VAT Laws works contract transactions too shall be subjected to VAT
within the purview of the entry 54 of the List II of the Seventh Schedule of
the Constitution at such rates as determined by the respective state VAT laws.
Example :- Building constructions works.

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Swapna Racha

Swapna Racha (Querist)

28 March 2012 Thank you sir,

but i have few questions

input credit whether available to the dealer or not on such work contract tax

Bhaskaran Chackrapani Warrier

Bhaskaran Chackrapani Warrier (Expert)

28 March 2012 Assessee's have option to pay tax either at normal rate or at compounded rate. If normal rate is opted, input credit can be taken in most of the state's law. Therefore, please check your state VAT laws and rules and come to a conclusion.

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