Works contract
This query is : Resolved
04 November 2013
My client is in Karnataka, building and selling residential flat he is just issuing bills against receipt of advances without any bifurcation of land, material and labour......... what % of service tax and Vat he should pay on advances as he is receiving from his customers..........and which scheme is better composition/ works contract / regular one.
Please any one answer my query.....
Please any one answer my query.....
Suresh Ramaswamy
(Expert)
04 November 2013
I am not fully aware of Karnataka VAT, but generally the provisions in all the states are more of less similar.
As per WBVAT, works contract where the components cannot be segregated, 1/3 is deemed to be labour services and the balance 2/3rds is subject to VAT. I am sure the provisions of KARNATAKA VAT ACT would be more or less similar.
Service tax on Construction of residential complexes - and commercial complexes, entitles availment of abatement at 70% or 75% as the case may be and service tax on the balance amount is payable @ 12.36%.
For VAT the registration should be under thye head "Works Contractor' and under Service Tax the service head should be Construction of residential complexes - and commercial complexes.'
As per WBVAT, works contract where the components cannot be segregated, 1/3 is deemed to be labour services and the balance 2/3rds is subject to VAT. I am sure the provisions of KARNATAKA VAT ACT would be more or less similar.
Service tax on Construction of residential complexes - and commercial complexes, entitles availment of abatement at 70% or 75% as the case may be and service tax on the balance amount is payable @ 12.36%.
For VAT the registration should be under thye head "Works Contractor' and under Service Tax the service head should be Construction of residential complexes - and commercial complexes.'
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Suresh Ramaswamy
(Expert)
10 November 2013
You are most welcome Mr. Inam.
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