we have undertaken a work contract of civil as well as fixing of furniture with material. we have used goods of 4% vat as well as 12.5% vat. as per works contract act we have to apply vat on 75% of contract value. let me know the rate of vat applied on 75% contract value in view that we are using 4% as well as 12.5% items in execution of work. in my opinion it should be taxed at 12.5%. kindly discuss if othe rate apply.
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If you are transferring the declared goods (4% goods) in the same form as you have purchased, the rate of VAT shall be 4% only. Otherwise, the rate of VAT on execution of works contract is 12.5%