WORKS CONTRACT TAX

This query is : Resolved

best (Querist)
Follow

09 October 2009 Dear,

AS PER WXT ACT WE ARE DEDUCTING 2/4 % of bill as WCT from the FINAL BILL.

QUERY-1.DEDUCTED MORE THAN 2/4 %.HOW TO SHOW IN QUARTELY RETURN

QUERY-2.HOW TO REFUND EXTRA DEDUCTION TO SUPPLIER .

PLEASE CONFIRM AT THE EARLIEST.

Regards,
Best

SARATHY RP

SARATHY RP (Expert)
Follow

10 October 2009 The question is not clear. Are you referring to deduction of VAT for Works Contracts exeucted by a sub-contractor?
Pl clarify.

Sarathy

Aashok Kumar Sharma

Aashok Kumar Sharma (Expert)
Follow

03 August 2025 Sure! Here's how to handle your queries about Works Contract Tax (WCT) deduction and excess deduction:
Query 1: How to show excess WCT deducted in quarterly return?
In the quarterly WCT return, report the actual tax deducted from the contractor's bill.
If you deducted more than the prescribed rate (2% or 4%), show the full amount deducted in the return.
Maintain proper records of the excess amount deducted separately for refund processing.
Some states provide a separate column for excess deduction in the return or you can mention it in the remarks section.
If your return format does not provide an option for excess deduction, report the total amount deducted and keep separate reconciliation records.
Query 2: How to refund the excess deduction to supplier?
First, verify and confirm the excess amount deducted.
Inform the supplier and issue a refund (or adjustment) via credit note or direct payment.
Maintain documentary proof of refund.
If you have already deposited the excess amount with the government, the supplier may have to claim refund from the tax department directly.
Alternatively, in some states, you may apply to the tax authorities for adjustment or refund of excess WCT deposited.
Ensure all transactions are properly recorded in your books and reflected in supplier's account statements.
Summary:
Issue Action
Excess WCT deducted Show full amount in return; keep separate records
Refund to supplier Refund excess amount via credit note/payment; supplier may claim govt refund if already deposited

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