Body CIRCULAR No 16/2018 No CT/21187/17-C1 Dated 27th June2018

Sub: VAT- Works Contract- Work carried out during VAT regime-instructions to the assessing authorities-reg.

Ref: 1. Advisory No 3 dtd. 18/07/2017 of this office.

2. Government letter No. B3/3/2018 dated 11/06/2018.

In order to have uniformity on the works contract and related issues, the department had issued advisory-3 dated 18/07/2017 for generating awareness regarding the levy of tax on works carried out during the pre-GST period and in the GST period.Where works have been completed during Pre-GST period, and payment in full/part is pending as on 01/07/2017, it was advised that tax should be remitted under VAT law as envisaged under section 142 (11) (a) of the CGST/SGST Act 2017.

With regard to many Government works, though works have been completed on or before 30/06/2017, payment of contract amount is yet to be disbursed. Majority of such contractors are paying tax under section 8(a) of KVAT Act. Before making such payment, tax has to be deducted as per section 10 of KVAT Act and certificate in Form 20 C has to be issued to the contractor. Since GST has been rolled out from 01/07/2017, details of contractual amount received and TDS can be furnished only by revising the return for the month of June 2017.

So, in order to facilitate the contractors to file return for such amount received, permission to revise the return for the month of June 2017 is granted and the following instructions are issued to streamline the procedure for revision of returns.

The dealer needs to file an application before the assessing authority, seeking permission to revise the return, supported with tax deduction certificate. The assessing authority shall forward the same, with proper remarks, to the concerned Deputy Commissioner of State Tax.The Deputy Commissioner shall verify the application and connected records, and if the request of the dealer is found genuine, the Deputy Commissioner shall give permission, and the system administrator will then initiate the Return to enable the dealer to do revision. But care should be taken to curtail all possibilities of misuse. The District Deputy Commissioners shall collect the details of such works, for which payment remains outstanding, from both awarders and contractors immediately so as to get a clear picture of the same. In cases where there is a possibility for receipt of balance contract amount on installment basis,entailing multiple revision of Returns, the respective assessing authority shall carefully monitor such cases.