Works Contract Tax

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This query is : Resolved

Shelly (Querist)

12 September 2008 This query is regarding an Indian public co, they got a building constructed over a period of 2 years on running bills for abt 1 crore, are they covered under works contract act and if so if they are supposed to deduct the tax and make the payment to the contractor? . they are not paying any service charge also..

Please tell me where i can find info on this..

CMA Jitendra Singh

CMA Jitendra Singh (Expert)

12 September 2008 They are covered under WCT as per state laws.

There will be income tax TDS also .

Please give more details about state and nature of contracts provided for maore detailed reply

Shelly

Shelly (Querist)

13 September 2008 The state Concerned is Andhra Pradesh and the contractor is to ptovide labour and material (Except steel). Please tell me at what rate WCT need to be deducted by my client before paying the money to contractor?

CA. O.P. Agarwalla

CA. O.P. Agarwalla (Expert)

15 September 2008 Shelly's question is not clear. It is also not clear that the query is about the principal contractor ot sub-contractor. It is said that the contract of supply oif labour and material. Supply of Labour and material, how it can be a matter of WC?
Please rearrange the question and resubmit the same.
One point should be made clear that in case a contractor get the work done through sub-contractor(s), taxable event remains one. The liability may be imposed by the Act on both the parties, but the same is to be interpreted in the said spirit. If the principal contractor is paying taxes on the whole amount of WC, sub-contractor can not be made liable for taxes on the same. And if the sub-contractor is not liable for tax, no TDS should be deducted from him.
If the Act is not clear in this regard, clarification may be sought from the proper authority.

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