Visual Catpro
   
TDS Certificate of VAT

1.      Section 27 read with Rule 46 requires every contractor to deduct 2% of payment on Account of valuable consideration exceeding Rs. 5 Lacs in a single contract in pursuance of a works contract.

2.      A certificate is to be issued in Form VAT-28 to the contractor.

3.      TDS amount mentioned in the TDS Certificate may be claimed as Input Tax Credit at S.No. 4(c) of Form VAT-15.

Accounting entry may be passed as under:
  
A/c Head
V.Class
Debit
Credit
Input Tax credit (VAT TDS)
 
5000.00
 
Party A/c
 
 
5000.00

4.      A separate VAT Class namely "ITC (Tax Ded Certificate)" is available in VAT classes and should be attached with the relevant ITC A/c.