Sir,
I am a accountant of a construction company. our company got a works contract from IRCON Ltd. while payment of running bills they deduct 2% VAT and 2% TDS. Please tell me to how to calculate VAT on works contract and file return with the tax authority. we also pay input vat on materials purchase for contruction like cement, TMT etc.....
You can take credit of the VAT paid on Construction Material. Further, I feel that IRCON is not deducting VAT @ 2%, instead they are deducting WCT on works contract contract. Please check.
IRCON is not allowed to recover VAT from the Contractors. It is the duty of the contractor to pay the VAT directly to the Government.
Moreover, there are various methods of calculating the VAT liability on works contract. Whatever, method you choose, it will have to be followed through out the contract.
Can any one help with Illustrate with FormT & Form R ?
Basically i had experience in Auto Manufacuring only just i entered in Construction line
every month client deducted the wct tax when remit the payment
in order to consultant i adjusted the tax when we pay vat
can any one explain my queriy?
Sir/Madam,
Can u tell the method of calculation of VAT liability on works contract. please ellaborate it if u know?
Mr. Tanusankar,
I am herewith attaching a details about work contract hope it will be help for u.
Dear Mr Day,
I Works in a Construction Company at NTPC Bihar Site. it is also a Work contract, we use consumption Basis for vat calculation, but at our site 4% wct is charged by NTPC and we take input whatever wct is charged from us. we use following method for Vat Calculation.
1. We File Quaterly return.
2. after each quater we got WCT certificate from NTPC and take the same contracted revenue in vat return
3. We Deduct Labour Charges, Planning Expenses, Store Consumables, labour welfare expenses, Equipment Hire Charges, Mess Expenses, Wages, Medical Expenses and 10% profit Commision to Sub contractor from our Gross revenue.
4. after deducting above expenses we reached at net revenue on which we have to pay Vat.
5. we devide net contracted revenue in proportion to Construction material Used ie 5% and 13.5% and got Vat tax payble amount.
6. from Vat tax payble amount we deduct Wct amont and Input tax credit on construction material consumed. and we pay balance amount to sales tax department.
CAclubindia
