Karnataka Vat - Works Contract
One of my client is a works contractor. He bills the client based on contract. He pays VAT @ 14.5% on civil services on 70% of bill amount. On remaining he calculates Service tax by applying reverse charge, effective rate being = 12.36% *50% = 6.18%.
Now, for the purpose of calculating total turnover under KVAT, should we consider the total bill amount ( which includes both material and service charges) or only consider the Material portion (i.e. 70% value)
Kindly clarify as to whether in VAT-100 , do we need to add service charges to arrive at the Total turnover or not ?
Yes, in VAT 100 Service charge should be declared in Labour charges column 2.1. Only the balance 30% of the turnover should be declared as labour charge.