Interstate indivisible works contract

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Dear Sir/Madam,

Hi to all.I have a query on CST chargeable on indivisible Interstate Works Contract.I know, on material value in interstate works contract CST is charged not on Labour portion and also know, in interstate works contract, the contractee can not deduct TDS where CST is applicable.Upto here, the conception is absolutuly clear. I, as on now, have read so many topics, expert comments, articles but one thing has not been clear to me is that like VAT, on what percentage CST will be charged in interstate indivisible works contract and what percentage will go for labour portion. For example, if the contarctor's invoice is for RS.2500/- (Gross) in interstate indivisible works contract then 2% CSt against Form 'C' will be charged or like WBVAT Rule 30, is there any rule applicable to find out material value and labour portion in indivisible interstate works contract.Again for example, in WBVAT as per Rule 30, as per our work nature (HVAC Supply,Installation.Testing, Commissioning), taking the above figure of Rs.2500/-, 85% of it would go for VAT & WCT and 15% would go as labour deduction.

I seek an expert comment to resolve my issue for which I am eagerly looking forward for the right reply. Meanwhile, my mission for quest of knowledge and search for reply will go on as long as I am not getting it.

Thanks to all.

Regards,

D Sen

 

Replies (1)

Incase of work contract,

Material identification method -if you are able identify the Material & Labour seperately there is no problem in charging the Tax and u need to maintain the stock records, original Invoices from reigstered dealers and other records as required by the State.

As u said the Specified percentage method like in TN for electrical 15%, Sanitary Contracts 25% Dyeing Contracts 50% etc can be taken as Service part and remaining as taxable.

and the other method is

Compounding method -  Civil work taxable @ 2% and all other Contracts @ 5%

 To avail the Form-C procured material should be used in mfr./resale.


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