WCT, TDS , Service tax implication on new startup - Professionals - Taxation - TIK Share
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WCT, TDS , Service tax implication on new startup

hans dc


Dear CA's


Can any one  Explain the implication and rates of  taxes for WCT , TDS & Service tax for a new entity with first turnover above 10 Lacs..


Thanks in advance

CA Pulkit Sharma


You can refer already posted threads for your all doubts, All about Service Tax on Works Contract and Karnataka VAT - Composition scheme for Works Contractor

Lets first understand what services comes under WCT scheme-

As per Definition of Works Contract provided in The Karnataka Vat Act,2003-

Works contract includes any agreement for carrying out for cash, deferred payment or valuable consideration, the building, construction, manufacture, processing, fabrication, erection, installation, improvement, modification, repair or commissioning of any movable or immovable property.

Also the definition of Dealer includes Works Contractors.

Section 4 of the VAT Act prescribes the liability of tax on WCT dealers.

If as a works contractor you take the benefits of Composition scheme the tax rate will be 4% and you will not be able to take benefits of input tax.

TDS implication

If you excute any work of center government or state government or any company owned by either of them, those companies will deduct tax equivalent to tax on contract prize.


hans dc


Thanks a lot for the reply pulkitji... 


Rahul Rai


Really good analysis of the law and point to point solution.