- December 4, 2015
- Posted by: Amit Mundhra CA
- Category: Rajasthan VAT
Rate of Works Contract Exemption Fees in Rajasthan VAT w.e.f. 01-04-2015
The Rajasthan commercial taxes department vide notification number F.12(23)FD/Tax/2015-206 dated 09-03-2015 has changed the rate of exemption fees as applicable to various types of works contract with effect from 01-04-2015 which is as follows.
Now, 2 options are provided to the assessees opting for works contract exemption fees scheme.
Option A:
| S. No. | Category of works contract | Exemption Fees (%) of the total value of the contract |
| 1 | Works contract where the cost of goods involved in execution of works contract does not exceed 5 % of the total contract amount | 0.10% |
| 2 | Works contract relating to construction and repair of roads, runways, bridges, dams, drains excluding sewerage system, tunnels, canals, channels, barrages, railway tracks, causeways, sub ways, diversion, spill ways, boundary walls, buildings and water harvesting system | 0.75% |
| 3 | Works contract awarded by Rajasthan Vidhyut Prasaran Nigam Limited, Jaipur Vidhyut Vitaran Nigam Ltd, Ajmer Vidhyut Vitaran Nigam Ltd, Jodhpur Vidhyut Vitaran Nigam Limited | 0.75% |
| 4 | Any other kind of works contract not covered by item number 1 to 3 above | 2.00% |
Conditions for availing Option A:
- The dealer who has opted for payment of exemption fees under option A, shall purchase taxable goods within the state from the registered dealer of the state for the execution of the works contract.
- In case such dealer, procures or purchases any goods in any manner other than the manner as provided above, in addition to the exemption fees, he shall be liable to pay an amount equal to the amount of tax that would have been payable had the goods been purchased in the state from a registered dealer.
- Input Tax credit will not be allowed.
Option B:
| S. No. | Category of works contract | Exemption Fees (%) of the total value of the contract |
| 1 | Works contract where the cost of goods involved in execution of works contract does not exceed 5 % of the total contract amount | 0.70% |
| 2 | Works contract relating to construction and repair of roads, runways, bridges, dams, tunnels, canals, channels, barrages, railway tracks, causeways, sub ways, diversion, spill ways, drains excluding sewerage system | 4.00% |
| 3 | Works contract relating to construction and repair of buildings, boundary walls, sewerage system, sewerage treatment plant, water supply works and water harvesting system | 5.00% |
| 4 | Works contract awarded by Rajasthan Vidhyut Prasaran Nigam Limited, Jaipur Vidhyut Vitaran Nigam Ltd, Ajmer Vidhyut Vitaran Nigam Ltd, Jodhpur Vidhyut Vitaran Nigam Limited | 3.50% |
| 5 | Works contract relating to setting up of new enterprise or expansion of existing enterprise manufacturing fertilizer within the state with minimum investment of Rs. 2500 Crores. | 1.00% |
| 6 | Any other kind of works contract not covered by item number 1 to 5 above | 6.00% |
Conditions for availing Option B:
- The dealer who has opted for payment of exemption fees in lieu of tax under option B shall be entitled to purchase the goods involved in execution of works contract from outside the state.
- Input Tax credit will not be allowed.
Awarder Identification Number made applicable for deduction of WCT under Rajasthan VAT
As per Rajasthan VAT Rules, 2006 the department has introduced the concept of Awarder Identification Number in budget 2013-2014 but the online facility has not been activated till late.
Now, as per dealer circular 22 dated 10-03-2015, the issued of Awarder Identification Number has been activated on the web site.
Thus from now on, all the deductors of WCT shall mandatorily have “Awarder Identification Number” for deduction and deposit of Works Contract Tax under Rajasthan VAT Act and Rules made thereunder.
Good Article. Expalin the exemption fee in good way. Can you explain the following situation:
Liability of subcontractor if main contractor opts exemption fee method.
Whether entry tax is payable if main contractor opts exempetion fee under option B