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TMI BlogTaxability of goods involved in Horticulture contractsX X X X Extracts X X X X X X X X Extracts X X X X ..... ekay International. Thereafter, a notice for suo-moto review of the said order was issued to the dealer vide no. 180/CDVAT/2007/75 dated 20.11.2012. (i) The Departmental Representative stated that in the case of M/s Shreejee Peekay International vide order no. 80/CDVAT/2007/183 dated 01.02.2008, it has already been held that Horticulture contracts don not always involve tax free goods. In contracts wherein taxable goods are involved would necessarily attract VAT. The rate of tax in respect of goods involved in the execution of works contract as per section 4 (d) of DVAT Act, 2004 is 12.5% and in respect of declared goods @4%. The composition scheme as provided in section 16 of the DVAT Act, 2004 would be available to the applican ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Definitions: Section 2 (1) (m) goods means every kind of moveable property (other than newspapers, actionable claims, stocks, shares and securities) and includes - (i) livestock, all materials, commodities, grass or things attached to or forming part of the earth which are agreed to be severed before sale or under a contract of sale; and (ii) property in goods (whether as goods or in some other form) involved in the execution of a works contract, lease or hire-purchase or those to be used in the fitting out, improvement or repair of movable property; Section 2 (1) (zc) sale with its grammatical variations and cognate expression means any transfer of property in goods by one person to another for cash or for deferred paymen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... involved in the execution of works contract if such goods are transferred from the contractor to the contractee in the same form in which they were purchased by the contractor: Provided Further that in respect of the works contracts which are in the nature of printing works, the rate of tax shall be five paise in the rupee.] (e) in the case of any other goods, at the rate of twelve and half paise in the rupee. section 5 Taxable turnover sub-section(2) In the case of turnover arising from the execution of a works contract, the amount included in taxable turnover is the total consideration paid or payable to the dealer under the contract excluding the charges towards labour, services and other like charges, subject to such conditi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nition of works contract as per the scheme of the Act, presently there are four schedules containing items ranging from 0% to 20% besides residual items are taxable @12.5% as per section 4 (1) (e) of the said Act. Further, section 4 (1) (d) of the said Act is exclusively related to rate of tax applicable in respect of the goods involved in the execution of the works contract which is 12.5%. Hence, the rate of tax on goods involved in the execution of works contract are not covered by the schedules but are governed by the section 4 (1) (d) of the said Act . In brief, all goods involved in execution of works contract except the declared goods (taxable @5%) are taxable @12.5% irrespective of the fact whether such goods pertains to Sc ..... X X X X Extracts X X X X X X X X Extracts X X X X
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