Contractor, VAT + CST

[tirthram arondekar]

Does an contractor liable under VAT for the contract receipts for which already service tax paid? if yes at what rate, how to treat input tax?

How to arrive at VAT.

Posts / Replies

[Pradeep Khatri]

Yes, if it falls under the category of 'Works Contract Services".  As per the Goa VAT Act, Section 2 (aq) “Works contract” shall include any agreement for carrying out for cash,deferred payment or other valuable consideration, the building, construction,manufacturing, processing, fabrication, erection, installation, fitting out improvement,modification, repair or commissioning of any movable or immovable property;.

Further, as per Section 28, there is a provision to deduct 1% TDS under Works Contract from the total payment which the contractor receives. 

Provided that, no such deduction shall be made where the amount or the aggregate of the amount payable to a dealer by such employer is less than one lakh rupees during a year or when the cost of material used in execution of the works contract is less than 10% of the contract value.

Please also get it clarified from your counsel.