VAT and Works Contract

   Ms Henna,

  The value added tax applicable on the amount pertaining to material supply in a works contract is works contract tax...MJK 

Dear Sir,

VAT is payable for sale of goods or purchase as the case may be as per the Schedule of each state Act.  VAT is also payable for works contract under separate section for material supply.  For this works contract, each state has its own tax rate.  Some state allows the dealer to opt for compounding rate without availing ITC.  From the question we are not able to know which state it pertains.

rengaraj r.k

Vat and WCT is the Same thing, WCT is Charged from the Contractor (Work Contractor - Who Supply Labour as Well as Material)

Contractors have two option in Work Contract to Pay Tax

1. Composite Scheme 

2. Non Composit Scheme