Works contract tax and AS-7
This query is : Resolved
19 November 2009
X,a works contractor in Kerala undertakes contract for construction of villas.During 08-09,he received 90 laks,but raised bills for Rs.45 lakhs.In the P&L for 08-09,income is recognised on percentage completion method as per AS-7 to Rs.92 lakhs.He had paid Kerala VAT on amount received,ie.Rs.90 lakhs.Is he liable to pay works contract tax on Rs.2 lakhs which is the difference of income recognised and money received?He pays the tax on compunding at 3%
19 November 2009
No need to pay KVAT on the said Rs.2 lakhs because bill has not been raised.
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