Our company is providing Works contract service. Since we make interstate purchase, we are not eligible for compensation scheme. we have been filing tax returns in Form I from FY 10-11 and availing credit on inputs, capital goods and TDS deducted by the client. However, in the turnover part, instead of showing the actual turnover, we have shown Purchase value+20% profit. Since it was less than the actual turnover, we have excess credit balance as on date which was accumulated from FY 2010-11.
Please let me know how can we revise/rectify the VAT returns? Is it fine if we reverse the excess credit in the forthcoming returns i.e., Jan 2015
Also, we are claiming a standard deduction of 30% of labour charges for arriving at the turnover and purchases are made under 5% and 12.5%. Please advice me on what is the rate to be applied on the turnover?
Also let me know whether input credit is available on purchase of capital goods like vehicles, P&M?