Saturday, February 18, 2012

Works contract Definition in Delhi VAT (DVAT)

Works contract includes any agreement for carrying out for cash or for deferred payment or for valuable consideration, the building construction, manufacture, processing, fabrication, erection, installation, fitting out, improvement, repair or commissioning of any moveable or immovable property. (Refer Section 2(1) of DVAT Act, 2004)
“Agreement” though not defined in VAT Act, has been cleared by judiciary as to be construed as provided in Indian Contract Act, 1872. Therefore, in works contract, the contractor promises to carry out some obligations like the construction of building, fabrication of machinery etc in consideration of the employer promising to pay a certain amount in cash or in the form of some other valuable consideration. (Refer Larsen & Toubro Ltd. vs State of AP (2006) 148 STC 616 (AP)

CA Ankit Gulgulia


  1. how much tax rate opting composition on works contract from f.y 2.011 to 2012


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