Dear All, here is a Practical issue encountered while auditing,
Kindly Contribute ,
Facts:
A company from Tirupathi ( AB ltd ) has formed an LLP ( K LLP) along
with 3 other Individual investors and an Estate owner to build and
operate a Estate Resort in Madikeri of Karnataka.
AB ltd due to its experience in the hotel initially commands one time
payment of 10% of the total capital brought in by the others Partners.
( which is adjusted against To be brought share of Capital of AB Ltd )
AB Ltd oversees all the construction of activity right from planning
till completion both on its own and through sub contractors ,
all the expenditure incrred by AB Ltd is reimbursed by K. LLP periodically,
AB ltd is also raising a separate Bill for Consultancy along with service tax.
Issues:
1. Is Works contract tax applicable to AB Ltd, Tirupathi. If so which
state governs WCT, Andhra Pradesh or Karnataka.
2.Whether the WCT to be deducted on the payments released by AB ltd to
its sub contractor in madikeri who is contracted for construction and
sourcing all material and labor
Open for Discussion...
CAclubindia
