A construction company having its HO in WB and registered under WB VAT Act. The company also registered with Assam VAT Act. In the year 2005-06 the company got a contract from NF Railway, Assam to build a bridge in Assam. For this purpose the company purchased iron & steels from outside of Bengal by using WB way bill in the year 2005-06 & 06-07, and also fabricated the bridge in WB. After fabricated the bridge was sent to Assam by using Assam way bill. Assam VAT was deducted by NF Rly, Assam and issue a certificate to us. In 2008-09 the company issue C form to supplier against the purchases made in 05-06 & 06-07. At the time of Assessment for the year 2008-09 the WB CTO demand VAT against the value of C form which was issue to supplier. Pls. advice how to VAT liability reduce.
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This transaction gets mostly covered underCST Act 1956. Here the issue of 'C' form for purchases of Iron& steel from outside WB is correct. The fabrication of bridge parts hav been done in WB i.e. the steel has been appropriated into the works contract of NF Rly in WB itself.Therefore,an interstate transaction has taken place in carrying the fabricated goods to Assam. Concessional rate of CST can be charged by issuing a 'C' form from Assam registration to the WB registration.Then in Assam bill is to be raised aginst NF Rly for the work done. The tax deducted by the NF Rly is to be adjusted to the VAT liability in Assam State. Please read carefully Section 4 of CST Act 1956.
MJ Krishanmurthy
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