Works Contracts - MP & Kerala VAT Acts
The Madhya Pradesh VAT Act was amended by Amendment Act, 2007 and the amendments came into effect from 1st April 2007. In Sec 7, a new clause to sub-section (1) has been inserted and the amended provisions are:
Sec 7 : Joint and several liability of certain class of dealers.
(1) (a) Where a dealer who carries on the business of supplying goods in the course of execution of a works contract entered into by him (hereinafter referred to as a contractor) through another such dealer (hereinafter referred to as a sub-contractor) directly or otherwise, and the sub-contractor executes such works contract and each or either of them is liable to pay tax under this Act, then notwithstanding anything contained in this Act, the contractor and the sub-contractor shall be jointly and severally liable to pay tax in respect of transfer of property in goods whether as goods or in some other form involved in the execution of such works contract.
(b) If the contractor proves in the prescribed manner to the satisfaction of the Commissioner that the tax has been paid by the sub-contractor on the turnover of the goods supplied in the course of execution of the works contract, the contractor shall not be liable to pay tax again on the turnover of such goods.
(c) If the sub-contractor proves in the prescribed manner to the satisfaction of the Commissioner that the contractor has opted for composition under section 11-A in respect of the works contract being executed by the sub-contractor, the sub-contractor shall not be liable to pay tax on the turnover of the goods supplied in the execution of the works contract.
This amendment appears to be consequent to the decision of the Andhra Pradesh High Court in L&T vs State of Andhra Predesh, where it was held that it is open to the State to frame appropriate rules to collect the tax either from the sub-contractor or the main contractor, but not from both. Please refer to my post of 11th July 2007.
This is a welcome amendment and I hope that similar amendments will be made to Kerala Value Added Tax Act also. Presently, the Kerala Act does not provide for deduction of turnover of the sub-contractor from that of the main contractor. The Kerala Act did contain a provision in Rule 10(i), but this was omitted by an amendment in 2005.
|
||||
GET QUOTE
We have to pay Work Tax on Sub Contract & Main Contract Billing. Thus the same is maily liable for double taxation.
Only Fewer states grants exemption, Govt must provide uniform policy by granting 100% Vattable against the tax paid by sub contractor, whether the contractor goes for composition of not finally govt is getting double tax on same work that to in billing where ther eis no addition in value.
Rgds
Saurabh
Can Anyone let mw know what rate of Income Tax TDS should be deducted on subcontractors payment by Contractor.
Mr Saurabh -
1) In which state are you paying VAT on both contractor’s and the sub-contractor’s turnover. The AP High Court has already decided that it is not acceptable.
2) The rate of TDS is 1%. Please refer to Sec 194C(2) of the IT Act.
Is work contract tax is applicable I raise two bills . one is for supply and another is for labour.
I want to know about Work contractor Tax pl. explain what is this and whose is liable of this tax
If we opt for composition in Kerala what is the tax rate? What about input tax credit on material purchased locally from registered dealer for execution of works contract.
Residential Plot, Pune, MaharashtraResidential Plot for sale in Kothrud 38, Pune, Maharashtra. Residential plot is well located available for sale in the prime locality, residential use allowed. Lease hold plot from sanctioned layout of registired society at prime location. Price is ….