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Question about VAT - Composition tax/house built by a contractor
Sat Nov 22, 2014Total posts : 2
tej patil
tej patil
Join date: Aug 2014
 Topic: Question about VAT - Composition tax/house built by a contractor
Hello Sir and Friends,

I am building a new house in Bangalore, Karnataka State. I live abroad and i am giving contract to a builder to construct the house. When we were discussing about the payment terms, our contractor mentioned that what ever the amount i pay to him there will be a 4% vat(compostition tax) to be paid in addition to it(from my pocket). 

So i wanted to understand how this works since i have no idea about this tax. Is this a Service tax or a VAT? and why do i have to pay this? or is this considered a service tax since my contractor is providing me the service and i should bear this tax?

Could anybody please explain me this. Thanks to all for your time and help.

Thanks,
Tej
Mon Nov 24, 2014Post  #1
S L Gupta (Civil Engg)
S L Gupta (Civil Engg)

Join date: Mar 2008		Dear Tej
        On the work above Rs 20000-00 there is provision to deduct the TDS  and deposited by you in govt treasury. Now it is up to you and contractor how to decide it.
 
Thu Dec 04, 2014Post  #2
JAI PRAKASH
JAI PRAKASH

Join date: May 2014		Just go for a simple contract and do not ask for a bill for warranty/Guarantee purpose. in that case there is no need to pay any tax.
 

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