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Gujarat work contract scheme 2014 for civil contractors

Gujarat government has introduced gujarat work contract scheme 2014  for civil work contractors and developers through budget 2014 vide notification GST-1014-884-VAT CELL dated . It is covered under section 41 of Gujarat Vat.

Reason for the gujarat work contract scheme 2014 :

In judgement of larson and turbo case, honable supreme courte has cleared the point that transfer of immovable property in contrustruction work  is taxable as deemed sale.

Who can get benefit?

  1. Registered or unregistered dealer under gujarat vat can avail the scheme.
  2. Civil contractor can take the benefit of the scheme.
  3. The dealer who is under processing of assessment, reassessment or revision can also get benefit of gujarat work contract scheme.

Transactions covered:

All transaction from 1/4/06 to the date of application can be covered.

Benefits of work contract scheme:

Remission of interest and penalty under gujarat vat act.

Rate of tax:

0.6% of turnover.

Conditions to opt the scheme:

  1. Assessee has to pay tax on unregistered purchase.
  2. If there is entry tax on trasaction, the assessee is also required to pay it.
  3. If registered seller of goods has not paid vat on sale, the assessee is required to pay it.
  4. If assessee has purchased goods from outside Gujarat and used in construction, he has to pay tax on deemed sale value.
  5. Assessee cannot go to appeal against order given under this scheme.
  6. Once tax is paid under para 1(B) of the scheme, assessee cannot get its refund.
  7. If there is confusion in matters, commissioner’s view shall be final.

 How to get benefit?

  1. Application to commissioner should be made within time limit.
  2. If assessee has filed appeal and it is pending, he can get benefit of the scheme by withdrawing the appeal.

Time limit:

Time limit to apply for work contract scheme  is extended to 31/1/15.

You can find full details from the following link.

Gujarat work contract scheme

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2 Comments

  1. By anitha maheshkumar

    Madam, what is the turnover limit for opting composition scheme under Gujarat VAT Act.
    what is the rate of Tax applicable for steel materials / semi-finished steel structures used in works contract.
    Can we claim VAT extra in our Invoices, when we opt for composition scheme.
    Will service tax will also form part of Turnover, while opting for compounding scheme.

  2. By GSS

    Madam, what is the turnover limit for opting composition scheme under Gujarat VAT Act.
    what is the rate of Tax applicable for steel materials / semi-finished steel structures used in works contract.
    Can we claim VAT extra in our Invoices, when we opt for composition scheme.
    Will service tax will also form part of Turnover, while opting for compounding scheme.

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