Kvat, 2003

No, you cannot utilise the certificate issued in the name of the principle contractor & there is no concept of issuance of certificate by the principle contractor to sub contractor. 

Thank you for your response sir. Presently our company has VAT Liability of Rs.35 Lacs approx and WCT deducted by Coastal Projects Ltd in our Bills amounts to Rs. 90 Lac Approx. As there is no provision for issue of Certificate to Sub contractor. So how shall we reply to Notice.  Can we apply Rasthriya Ispat Ltd Case of Indirect Tax Laws as the Turnover has already suffered the WCT.

There is no such provision in karnataka,  for deduction of TDS from the amount payable to the sub contractor. So the amount recovered from your bills is not a statutory deduction, these deduction might be on account of clause in the sub contract agreement with coastal projects ltd. Check the relevant clause in your sub contract agreement. Generally the amount deducted by the principal contractor will be refunded to sub contractors when the principle contractor get the refund from the department. 

There is no vat liability on the principle contractor as they can avail the exemption from VAT on the works executed by the sub contractor. So you claim amount from coastal and discharge your VAT liability.