Composition Scheme in Works Contract

Normally, a contractor in WCT pays 12.5% Works Contract after deducting Input Vat on Purchase of Material etc (Output WCT-Input Vat=WCT Payable)

However, if he opts for composition scheme, he pays Output WCT at lower rate.

However, he cannot take input of vat on any expenses.

Example

Suppose Construction service provided of 100 lacs+1% WCT under Composition

Vat on Materials used in production =30 lacs+ 12.5% Vat

What is WCT Payable