Normally, a contractor in WCT pays 12.5% Works Contract after deducting Input Vat on Purchase of Material etc (Output WCT-Input Vat=WCT Payable)
However, if he opts for composition scheme, he pays Output WCT at lower rate.
However, he cannot take input of vat on any expenses.
Example
Suppose Construction service provided of 100 lacs+1% WCT under Composition
Vat on Materials used in production =30 lacs+ 12.5% Vat
What is WCT Payable
View AnswerIn this case,
Output WCT=100*1%=1 lacs
Input Vat=0
WCT Payable=1-0=1 lacs
