As per DVAT,there are 2 schemes applicable for Composition Dealers in Works Contract

Scheme A and Scheme B

 

Difference between Scheme A and B

SCHEME A

SCHEME B

It has lower rate

It has higher rate

Conditions

Contractor should not have

·  Interstate Purchases of Goods

· Interstate Sales

 

However,he can have Interstate purchase of Capital goods

 

 

Conditions

Contractor should not have

·  Interstate Sales

 

 

However ,he can make Interstate purchases of goods and capital goods against C Form,F Form 

He can also Import goods from outside India 

 

Rates Applicable under Composition in both Schemes

Type of WCT

Scheme A Rate

Scheme B Rate

Construction Contracts

(Value of Land is included in Total Consideration)

(if entire consideration Is received after completion of works contract,

then not covered here)

1%

3%

Printing Contracts

Textile Processing

Electroplating/Electro Galvanizing

Re-treading of old tyres

2%

3%

All Other Contracts

3%

6%

 

Note:-

Above Rates applicable are on Total Turnover (Labor+Material)

 

What are the Conditions to be Satisfied in both Schemes

-a-

  • Purchase should be from Registered Dealers only (2% of Purchase or 25 lacs whichever is less can be from Unregistered Dealer)
  • Input of Purchase cannot be taken
  • On Sale Also,Tax invoice cant be issued
  • Only Retail Involce to be issued and tax should not be separately collected on bil
  • Separate Records of different types of purchases can be prepared
  • On Sale of P&M outside state,full rate of tax to be charged (C Form cannot be used)

-ea-

What is the Return Form Applicable for Composition Dealers?

View Answer
  1. Tax Practical
  2. Practical WCT (Work Contract Tax)
Tax Practical
Practical WCT (Work Contract Tax)

About the Author

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CA Maninder Singh
CA Maninder Singh is a Chartered Accountant for the past 10 years. He also provides Accounts Tax GST Training in Delhi and Pune.