suppose governmet has given contract to main contrctor and deduct works contract tax and main contract gives contract to sub contractor.as per law works contract taxcan be set off with MVAT .but if sub contractor pays vat then how he can get set off ? is there any kind of structure available ? please tell me
Hi Mr. Amit,
The sub-contractor will get credit of input tax charged by the main contractor. If the main contractor is giving part of the work as sub-contract, the sub-contractor can get credit of output tax charged by the main contractor. Sub-contractor can even claim input tax paid on his purchases.
If the above is not sufficient to take care of TDS, main contractor can claim refund from the department.
Rgds/Dharmaraju
CAclubindia
