TMI BlogWhich Taxes are Applicable for ContractX X X X Extracts X X X X X X X X Extracts X X X X ..... We are a Contractors Fabricators of Aluminium Steel - Windows/ Doors/ Partitions/ Ceiling/ Structural Glazing/ Cladding work etc. We Purchase a Material (i.e.: Aluminium/ Glass/ Plywood/ Hardware/ ACP, etc.) from market Also taking a service of Powder Coating / Anodizing on Aluminium or Steel from outside service providers then we fabricates all of above also do a installation (fixing) on site. So while preparing an Invoice Which Taxes are Applicable How many Percentges. VAT/ CST/ ST/ WC VAT --- ? From Our Clients, 1 Client is a Building Contrctor and they do a various projects for their clients. As they told as follows: on 67% of Total Bill Value - M VAT @ 12.5% on 33% of Total Bill Value - ST @ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 12.36% will be applicable. on 67% of Total Bill Value - M VAT @ 12.5% And on 33% of Total Bill Value - ST @ 12.36% will be applicable. Can w emake a bill as above or it is not perfect. Thank you, - Reply By Pradeep Khatri - The Reply = 58. Determinatio n o f sale price and of purchase price in respect of sale by transfer of property in goods (whether as good or in some other form) involved in the execution of a works contract.- (1) The value of the goods at the time of the transfer of property in the goods (whether as goods or in some other form) involved in the execution of a works contract may be determined by effecting the following deductions from the value of the e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntire contract, in so far as the amounts relating to the deduction pertain to the said works contract: (a) labour and service charges for the execution of the works 1[*.*.*.]; (b) amounts paid by way of price for sub-contract, if any, to sub-contractors; (c) charges for planning, designing and architect s fees; (d) charges for obtaining on hire or otherwise, machinery and tools for the execution of the works contract; (e) cost of consumables such as water, electricity, fuel used in the execution of works contract, the property in which is not transferred in the course of execution of the works contract; (f) cost of establish ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ment of the contractor to the extent to which it is relatable to supply of the said labour and services; (g) other similar expenses relatable to the said supply of labour and services, where the labour and services are subsequent to the said transfer of property; (h) profit earned by the contractor to the extent it is relatable to the supply of said labour and services: Provided that where the contractor has not maintained accounts which enable a proper evaluation of the different deductions as above or where the Commissioner finds that the accounts maintained by the contractor are not sufficiently clear or intelligible, the contractor or, as the case may ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be, the Commissioner may in lieu of the deductions as above provide a lump sum deduction as provided in the Table below and determine accordingly the sale price of the goods at the time of the said transfer of property. TABLE S r . No. T yp e of Works Contract *Amoun t to be deducted from the contract price (expressed as a percentage of the contract price) (1) (2) (3) 1 Installation of plant and machinery Fifteen per cent. 2 Installation of air conditioners and air coolers. Ten per cent. cent. cent. 3 Installation of elevators (lifts) and escalators. Fifteen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... per cent. 4 Fixing of marble slabs, polished granite stones and tiles (other than mosaic tiles) Twenty five per cent. 5 Civil works like construction of buildings, bridges, roads, etc. Thirty per cent. 6 Construction of railway coaches on under carriages supplied by Railways. Thirty per cent. 7 Ship and boat building including construction of barges, ferries, tugs, trawlers and dragger. Twenty per cent. 8 Fixing of sanitary fittings for plumbing, drainage and the like. Fifteen per cent. 9 Painting and polishing. Twenty per cent. 10 Construction of bodies of motor vehicles and const ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ruction of trucks. Twenty per cent. 11 Laying of pipes. Twenty per cent. 12 Tyre re-treading. Forty per cent. 13 Dyeing and printing of textiles. Forty per cent. 2[14 Annual Maintenance contracts. Forty per cent 15 Any other works contract. Twenty five per cent] 3[*Note : The percentage is to be applied after first deducting from the total contract price, the quantum of price on which tax is paid by the sub-contractor, if any, and the quantum of tax separately charged by the contractor if the contract provides for separate charging of tax.]. 4[1A) In case of a construction contract, where al ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ongwith the immovable property, the land or, as the case may be, interest in the land, underlying the immovable property is to be conveyed, and the property in the goods (whether as goods or in some other form) involved in the execution of the construction contract is also transferred to the purchaser such transfer is liable to tax under this rule. The value of the said goods at the time of the transfer shall be calculated after making the deductions under sub-rule (1) and the cost of the land from the total agreement value. The cost of the land shall be determined in accordance with the guidelines appended to the Annual Statement of Rates prepared under the provis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ions of the Bombay Stamp (Determination of True Market Value of Property) Rules, 1995, as applicable on the 1st January of the year in which the agreement to sell the property is registered: Provided that, deduction towards cost of land under this sub-rule shall not exceed 70% of the agreement value.] (2) The value of goods so arrived at under sub-rule(1) shall, for the purposes of levy of tax, be the sale price or, as the case may be, the purchase price relating to the transfer of property in goods (whether as goods or in some other form) involved in the execution of a works contract. 1 These words were deleted by Notification No. STR.1506/CR-38/Ta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... xation-1 Dt. 8th September 2006. Earlier these words read as, where the labour and service done in relation to the goods is subsequent to the said transfer of property 2 This entry was substituted with effect from 1st April 2006 by Notification No. STR. 1506/ CR-38/Taxation-1 Dt. 8th September 2006 Earlier this entry read as, 14 Any other works Contract Twenty per cent 3 These words were substituted with effect from 1st April 2005 by Notification No. STR.1506/CR- 38/Taxation-1 Dt. 8th September 2006. Earlier these words read as, *The percentage is to be applied after first deducting from the total contract price, the amounts paid by way of pri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ce for the entire sub-contract to sub-contractors, if any . 4 This rule was inserted and deemed to be inserted w.e.f. 20th June, 2006 by Notification No. VAT-1507/CR-53/Taxation-1.- 1st June 2009. - Reply By Mahaganapathi V - The Reply = Sir From the above it is udnerstood that your opertaion falls with in the defenition of manufacturing. You buy material and incur labour and overheads to make the finished product. In your invoice you should charge necessary Excise duty, VAT - if with in the state - Excise duty + CST if outside the state. As for as installation is concerned that will be covered under service tax. The entire value of installation would fall under service tax. Since ready made doors and wi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ndows are availabel in market your fabrication can be categorised as manufacture. As far as the glazing and glading work that would come under both VAT and Service Tax (Works Contract Service) for which the previous reply shall apply. Pl refer the rates for service tax (Presently 4.8% + 3% surcharge = 4.94% - Which Taxes are Applicable for Contract - Query Started By: - Jatin Mistry Dated:- 11-4-2012 Value Added Tax - VAT-CST - Got 2 Replies - VAT and Sales Tax - Discussion Forum - Knowledge Sharing, reply post by an expert, personal opinion Tax Management India - taxmanagementindia - taxmanagement - taxmanagementindia.com - TMI - TaxTMI - TMITax ..... X X X X Extracts X X X X X X X X Extracts X X X X
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