Works contract
This query is : Resolved
CA. SANDEEP SHARMA
(Querist)
11 September 2011
1. we are providing service of laying of
LAN,WAN , NETWORKING.
2. we get the contract from the companies
for laying of the network and for sale
of items.( i.e divisible contract).
Normally the contract take 2 to 3 month
to complete.
3 my question is what kind of registration
we required in Delhi vat . should we go
for simple registration or should we go
for works contract registration.
4. and also how should we account for
income from these work contract. the
bill for laying of lan and for sale of
material is issued after completion of
contact
LAN,WAN , NETWORKING.
2. we get the contract from the companies
for laying of the network and for sale
of items.( i.e divisible contract).
Normally the contract take 2 to 3 month
to complete.
3 my question is what kind of registration
we required in Delhi vat . should we go
for simple registration or should we go
for works contract registration.
4. and also how should we account for
income from these work contract. the
bill for laying of lan and for sale of
material is issued after completion of
contact
MJ Krishnamurthy
(Expert)
12 September 2011
Mr Sandeep,
This comes under normal VAT registration,because you are engaged in sale and works contract also.If your contract is fully divisible,i.e.you raise bills for labour charges and sale of materials separately the matter becomes very easy.You can claim exemption on all labour charges and declare the sales only.
If you are doing a composite contract,i.e.
quoting rates on the finished work,then you have to account the labour expenses and works expenses properly and claim exemption on them. The balance amount will be taxable.
MJK
This comes under normal VAT registration,because you are engaged in sale and works contract also.If your contract is fully divisible,i.e.you raise bills for labour charges and sale of materials separately the matter becomes very easy.You can claim exemption on all labour charges and declare the sales only.
If you are doing a composite contract,i.e.
quoting rates on the finished work,then you have to account the labour expenses and works expenses properly and claim exemption on them. The balance amount will be taxable.
MJK
13 September 2011
I agree with the expert
CA. SANDEEP SHARMA
(Querist)
17 September 2011
thanks a lot..
but one this is not clear sir,
1. how should we account for
income from these work contract. the
bill for laying of lan and for sale of
material is issued after completion of
contact. do we have to make provision for contract on percentage completion method in respect of project which are started before march 11 and which will be finalised in next financial year and bill will be raised in next financial year
thank in advance
but one this is not clear sir,
1. how should we account for
income from these work contract. the
bill for laying of lan and for sale of
material is issued after completion of
contact. do we have to make provision for contract on percentage completion method in respect of project which are started before march 11 and which will be finalised in next financial year and bill will be raised in next financial year
thank in advance
MJ Krishnamurthy
(Expert)
17 September 2011
Mr Sandeep,
You can raise bills for laying of lan and supply of materials seperately. For the incomplete works remaining at the end of the year suitable provision has to be made in the form of work-in-progress and in the next financial year bill may raised after completing the work.
MJK
You can raise bills for laying of lan and supply of materials seperately. For the incomplete works remaining at the end of the year suitable provision has to be made in the form of work-in-progress and in the next financial year bill may raised after completing the work.
MJK
You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now
Click here to login now
Similar Resolved Queries
Unanswered Queries
- Depreciation Chart Companies Act
- GST Audit whether Govt Companies are exempt?
- PTRC Show Cause Notice on Email
- Unable to File TDS Q2 Return – New TRACES Portal Error
- Capital Gail Exemption Certificate
- Accounting treatment of AMC alongwith the purchase of Laptop
- Issuing of delivery challan by seller of goods
- Not ordinarily resident having partnership income in India and salary in USA is any form to filed be
- Taxation of crypto futures in India Fy 2026- 2027
- EPF ECR NEW RULES Sep 17th 2026
- GST Treatment of Purchases with GST Paid where Outward Supplies of Manufactured CattleFeed Exempt
- Expert Help Required for TDS Refund 100000 Through TRACES – AY 2022–23
- IMPORT PURCHASE ENTRY PASSED IN BOOKS OF ACCOUNT
- FAST DS 26 Undisclosed Foreign Asset Disclosure Scheme 2026
- Regime change
- Goods sold but invoice not issued
- Tally: Imported bank entries do not show up in manual reconciliation
- Sales of goods of amount Rs97 lakhs to a party
- Confused About My Career After 12th — Cyber Security, AI or Finance? Need Guidance
- FAST-DS 2026 Under Tax Law - No recourse or support for person declaring via this scheme?
Trending Online Classes
-
DT & Audit (Exam Oriented Fastrack Batch) - For May 26 Exams and onwards Full English
CA Bhanwar Borana & CA Shubham Keswani
Subscribe to Pro
Join an elite circle of professionals
CAclubindia
