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Query Answer
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Works contractor receive cheque against their contract value from government. They are not issuing any invoices to government for particular work but GST purpose they maintain Invoice copy with considering this contract value as Invoice value and do contract value x 1/1.12 for deriving Taxable amount of Contract.

Now if we do this methodology then Gross sale amount as per books of account and 26 AS has been deferred as Government is Deducting TDS on Contract Value only.

Kindly give your comment in this regard.

Reply

As far as I understand in the instant case, the taxpayer is taking govt. contracts inclusive of GST i.e. contract price is bifurcated in two part one is value of supply and one part is GST, whereas the income tax department is always deduct TDS on total contract price and consider it as turnover which is reflected in 26AS.

Accordingly there will be difference in turnover in books of accounts and 26AS. If department will ask for such difference, the assessee can explain that Government generally enters into all inclusive contracts where the price quoted is inclusive of all taxes. And if the contractor take whole amount as turnover excluding GST, then he has to pay GST out of his pocket and this will not be convenient for contractors.

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