Answer Posted / ca sachin agarwal

Let me tell you in simple words ,WCT is like VAT, Whenever we take any contract where material and services both are to used like goods repair where that service provider would be providing service as well as proving material , It is called works contract. Actually WCT is calculated on the value of material and on the value of service , we have to give service tax.

But it is always not possible to bifurcate the value of goods and service. In that case, govt has provided rules where u can pay tax on presumptive value.
In WCT service provider and receiver have to pay 50-50% ST.

WCT rate is 3%( if registered , otherwise 4%)

Like if you are getting your goods repaired and the SP gives a bill of 1,00,000 then

service chage = 1,00,000
service tax on bill charged by SP = 1,00,000*12.36%*70%/2 =4326
and we will also pay 4326 to govt directly .

and WCT shall be = (1,00,000+4326)*3% =3130

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