Work Contract Tax in Maharashtra

This query is : Resolved 

19 October 2007

Suppose a company (A Ltd.) which is a service oriented company gives a contract to a contractor (B Ltd.) for interior work of a newly acquired premises. Total contract value is 1.5 crores. The contractor charges 12.5% on 80% of the contract value and service tax on 20% of the value. Company (A Ltd.) deducts TDS on contract under income tax act. Do company (A Ltd.) needs to deduct TDS under section 31 of MVAT, 2005 on payment made to contractor (B Ltd.). If yes, then on what amount it needs to deduct TDS under MVAT.

Dayal (Expert)
20 October 2007

As per the act if the total amount paid to the contractor exceeds Rs. 5 lakhs excluding taxes then TDS @ 2% to be deducted under MVAT for a registered dealer and 4% for a non registered dealer.

This TDS is over and above the TDS deducted under Income Tax Act.

I hope this clarifies your query

KAAPIL (Expert)
05 November 2007

TDS @ 2% to be deducted under MVAt for RD and 4% for URD.
I hope query is resolved.

Ravikumar.G (Expert)
09 November 2007

Thanks for the inputs

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