• Sep
  • 22
  • 2013

DVAT – Effective Tax Rate Tax on Certain Works Contract Activities Reduced

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Rakesh Garg, FCA

Effective Rate of Tax on Certain Works Contract Activities Reduced

under the Delhi VAT Act

with effect from 20.09.2013

[vide Notification No. F.3(16)/Fin.(Rev-I)/2013-14/dsVI/785 dated the 20.09.2013]

For the purpose of computation of taxable turnover in works contracts: Where amount of labour, services and other like charges is not ascertainable from the books of accounts of the dealer (being works contractor) or where he fails to produce documentary evidence in support of such charges, the amount of such charges shall be calculated on the basis of percentages specified in the Table given in Rule 3(2) of the Delhi VAT Rules.

The Government has amended the said Table with effect from 20.09.2013 and standard percentage of certain activities has been increased (and thus effective rate of VAT has been decreased, if claiming labour & services on percentage basis), as under:

Sl.

No.

of

Table

Nature of Activities

Percentage of

Labour & Services

Effective Rate

of DVAT

Up to

19.9.2013

From

20.9.2013

Up to

20.9.2013

From

20.9.2013

(A)

(B)

(C)

(D)

(E)

(F)

20

Book-binding

20%

50%

10%

6.25%

21

Textile processing such as dying, fabrication, tailoring, embroidery and other similar activities where textile is supplied by the contractee

20%

50%

10%

6.25%

22

Electro plating, electro galvanizing, anodizing, powder coating and other similar activities

20%

50%

10%

6.25%

23

Re-treading of old tyres

20%

40%

10%

7.5%

Note: Effective DVAT rate has been calculated as:-   12.5 * [100 (–) C or D] % .

Applicable rate of works contract (other than printing works contract) in Delhi VAT is 12.5%.

(Author may be reached at ssarca.rgarg@gmail.com)

—————-

Download Notification No. F.3(16)/Fin.(Rev-I)/2013-14/dsVI/785 dated the 20.09.2013


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