Works Contract Tax, Other Topics

[Srivatsan Krishnamachari]

Dear Experts,

Please let me know the WCT% in case works contract in various situations. In this Labor cess also need to be considered?.

Regards

Srinivas

Posts / Replies

[MARIAPPAN GOVINDARAJAN]

For which State it is required?

[Ganeshan Kalyani]

SERVICE TAX : If you are a service provider under works contract service, and you are an individual, firm , HUF and the recipient is a body corporate then you have to charge half of service tax @15% on 40% of Value of service in case of original works and on 70% of value of service in case of other than original works.

VAT : Regarding material portion involved in the works contract then applicable VAT shall be charged on invoice.

VAT- TDS (WCT): the works contract tax is a tax to be deducted by the recipient of service from the payment to be made to contractor . A certificate is then issued by the service recipient to the contractor after making payment of the tax so deducted , based in which the contractor shall tax credit against output VAT payable.

[Ganeshan Kalyani]

Labour Cess need to be paid by the contractors. If contractor does not pay it then the owner (Service receiver ) shall pay the tax.

[Srivatsan Krishnamachari]

Thanks for replies. This is supply from Telangana to AP.

Regards

Srinivas

[Ganeshan Kalyani]

In case of interstate works contract service being provided then in my view 'works contract tax ' is not applicable.