Works contract

This query is : Resolved

CA PRADEEP KUMAR MISHRA (Querist)
Follow

28 November 2011 whether VAT and Service tax both is applicable on works contracts.

if yes, what is the rate and procedures in works contracts in west bengal.

MJ Krishnamurthy

MJ Krishnamurthy (Expert)
Follow

28 November 2011 Mr. PK Mishra,
VAT is applicable on the value of transfer of property and Service tax is applicable on the value of labour and other services. Rate of VAT is 4% on the value of declared goods and 12,5% on the value of other goods involved in the works contract. Service tax is 10% and cess.
MJK.

CA PRADEEP KUMAR MISHRA

CA PRADEEP KUMAR MISHRA (Querist)
Follow

29 November 2011 Thanks Sir,

I could not undersatand the meaning of Declare Goods on which Vat is applicable at 4% and Other Goods on which Vat is applicable at 12.5%.

I have read that service tax is 4.25% if the value of services could not be segregated.

MJ Krishnamurthy

MJ Krishnamurthy (Expert)
Follow

29 November 2011 Mr. PK Mishra,
There are some goods mentioned in Sec 14 of CST Act 1956 such as :Cereals,pulses, cotton,cottonyarn,cotton,manmade and woollen fabrics,oil seeds,iron and steel,jute,sugar,LPG,crude petroleum,hides and skins.These goods are chargeable @4% and the remaining goods used in works contract are chargeable @12.5%.
The total contract value can be segregated into labour and matrial easily.Suppose your total contract value is Rs10 lakhs. You buy 5.5laks worth of material such as cemnt,sand jelly,bricks,wood etc,labour expenses is
Rs2.5lakhs,services like transport,electricity,water etc for Rs1 lakh and GP Rs1.0lakhs.Now distribute the gross profit to thease items of expenses on % baasis like Rs55,000/-for material,25,000 for labour,Rs10,000 for others.Your total value of srvices and labour comes to(Rs2.5laks+Rs1.0laks+Rs25,000+Rs10,000)=Rs3.85lakhs.on this it 10.25%.It is slightly less than 4.25%on the whole amount of contract.In the same waay the total value of material supply becomes Rs6.05lakhs.Out of this on the value of steel supply it 4% and on the rest12.5%
MJK

You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now

Summarize this with AI

ChatGPT Perplexity Claude Google AI Grok

Similar Resolved Queries

Unanswered Queries

Popular
Recent

Trending Online Classes

Direct Tax Laws & International Taxation May 26,Sept 26 & Jan 27

CA Arvind Tuli

Enroll Now
Audit Fast Track Recorded Batch For May 26,Sept 26 & Jan 27

CA Aarti Lahoti

Enroll Now
DT & Audit (Exam Oriented Fastrack Batch) - For May 26 Exams and onwards Full English

CA Bhanwar Borana & CA Shubham Keswani

Enroll Now

view all classess

Meet our CAclubindia PRO Members

Angadi & Co

SHUBHANGI GOEL

SUMAN SAHA

AJAY Kumar Agrawal

Pawan Haryani

Subscribe Now

Works contract

Similar Resolved Queries

Trending Online Classes

Meet our CAclubindia PRO Members

Quick Links

Browse by Category

Latest Job Openings

Manager- Finance and Compliance

Accountant

CA Final

GST CONSULTANCY

Article Assistant

GST CONSULTANT