Vat on contractor

Dear friends

xyz pvt ltd company get a contract order from bhusan steel ltd. for rs. 2500000.00 & bhusan steel can deduct vat @ 4% on the bill amount Rs.100000.00 & the xyz company get a certificate from commercial tax departmant of odisha for the contractor can  deduct 20% of the sum received by the contractor & no deduction of tax at 80% sum received by the contractor & my query is that the xyz company can show his vat return of the above vat amount & which amount o be show in vat return kindyl clarify 

Replies (1)

   I think the contractor is allowed deduction of 20% of total receipts towards labour charges. In the returns you have to declare total receipts and also show the authorised reduction of 20%. Then calculate your tax liability.By reducing that amount by the tds amount you will get the net payable/refundable amount....mjk

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