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Shall we claim wct with out vat registration

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chandrasekhar pv

manager

23 Points Posted on 11 September 2013

sir good morning and have a nice day.

Lack of proper knowledge the company has not registered with VAT authorities till date. Now we are going to take regisrtation.

my question is we are doing purely labour based construction business since June 2012, our clients deducted WCT of around Rs.1.65 lac during the financial year 2012-13, and this financial year around Rs.2.50 lac.

Is there any provision to take back the WCT deducted by our clients, if we took VAT/CST registration now. VAT authorities may impose any penalties if we may show actual business commencement date.

please advice

with sincere regards

chandra sekhar

Replies (1)

MJ Krishnamurthy

ACCT(Retd)

5757 Points Posted on 11 September 2013

A person engaged only in purely labour contract work need not register under VAT laws. Even if there is some small quantity of material consumption-total amounting to less than Rs5 lakhs in a year-there is no neccessity to take up a registration.In this position the clients should have been informed that you have no tax liability under the concerned VAT Act and hence no tds is to be made.In all the states this provision of either not making tds or doing it at a reduced rate as per the vat liability of a contractor is available in the vat laws.Now also you neeed not register if you are not liable to do so(i.e.taxable sales beeing less than Rs5 lakhs).As the tds has been done in an improper way you can file an application before the commissioner/joint commissioner of commercial taxes of your area furnishing all relevant details. After making necessary enquiries the department will refund the irregular tax recovery made from you..... mjk