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)
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CA Maninder Singh
CA Maninder Singh is a Chartered Accountant for the past 8 years. He provides courses for Practical Accounts, Taxation and Efiling at teachoo.com .
  • Ramesh Tikhe's image

    I have constructed A House on existing ground floor. The Work contract is done with the builder (including service and material) for Rs. 7.50 Lakhs. Please provide me the exact amount of service tax and vat on the above amount.  My tax state is Maharashtra

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