In works contracts, between contractor and sub-contractors only one is liable to pay tax

4 comments Saturday, June 11, 2011
 
When works contract is sub-contracted there is only one taxable event and between main contractors and sub-contractor only one is liable to pay tax on the goods incorporated in the works contract. Herebelow this issue is discussed in the light of decision of Supreme Court and P&H High Court in the context of VAT provisions especially under Punjab VAT Act, 2005. 

Definition of works contract:  As per Section 2 (za) of Punjab Value Added Tax Act  “works contract” includes any agreement for carrying out, for cash, deferred payment or other valuable consideration, building ,construction, manufacturing, processing, fabrication, erection, installation, fitting out, improvement, modification, repairs or commissioning of any movable or immovable property
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