Procedure to be followed by Deductee (Contractor whose Tax Deducted under TDS)

He has to file  Normal DVAT 16 Return in case of Works Contract  And  DVAT 17 in case he is applying for Composition Scheme

Suppose Tax Rate applicable on Works Contract is 12.5%

He can deduct this TDS from his Vat Payable and pay balance tax if any

Example 1

Suppose Construction service provided of 40 lacs+12.5% WCT

Vat on Materials used in production =8 lacs+ 12.5% Vat

What is WCT payable assuming TDS Deducted by Contractee @ 4%

Example 2

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 assuming TDS Deducted by Contractee @ 4%