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TMI BlogRuling under section 85 of DVAT Act, 2004 in respect of Horticulture Contracts.X X X X Extracts X X X X X X X X Extracts X X X X ..... on/ruling on the following point:- Whether VAT is applicable on Horticulture composite contracts wherein goods involved/used for execution of such works contract are covered under Schedule I of the DVAT Act, 2004 and are exempted from levy of VAT? The said application has generic ramification as regards the legal position in respect of taxability of exempted goods when used in the execution of works contract, both to the authorities subordinate to the Commissioner, VAT, Govt. of NCT of Delhi and the entities/dealers who are carrying on or who may undertake such transactions. 2. While explaining the nature of transaction, the applicant in his application dated 20.12.2012 has stated that many departments/organizations/companies awar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or deferred payment or for valuable consideration, the building construction, manufacture, processing, fabrication, erection, installation, fitting out, improvement, repair or commissioning of any moveable or immovable property; (ii) Relevant Provisions of the DVAT Act section 4 Rates of tax (1) The rates of tax payable on the taxable turnover of a dealer shall be- (a) in respect of goods specified in the Second Schedule, at the rate of one paisa in the rupee; (b) in respect of goods specified in the Third Schedule, at the rate of four paise in the rupee; (c) in respect of goods specified in the Fourth Schedule, at the rate of twenty paise in the rupee; (d) in respect of the goods involved in the execution of the works co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lue at the time of transfer of property in goods (whether as goods or in some other form) involved in the execution of work contract and shall exclude - (i) the charges towards labour, services and other like charges; and (ii) the charges towards cost of land, if any, in civil works contracts; 4. It is relevant here to mention that in the Horticulture Contracts involving development of lawns/parks/roadsides and their maintenance, there may be use of taxable goods such as bricks, stones, cement and exempted goods such as plants, fertilizers, etc. However, in exclusive horticulture contracts, the tax-free goods such as seeds, saplings, plants, organic manure, fertilizers, bio-inputs like bio-fertilizers, micronutrients and plant growth ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... led under section 85 of Delhi Value Added Tax Act, 2004 is given as follows: The rate of tax in respect of the goods involved in the execution of all types of works contracts, irrespective of the fact under which schedule such goods are covered, are taxable @12.5% under section 4 (1) (d) of the Delhi Value Added Tax Act, 2004 . But the declared goods (as defined in the Central Sales Tax Act, 1956 ) and used in the same form are taxable @5% (earlier it was 4%) w.e.f. 01.10.2011. This ruling is only clarificatory in nature and hence shall be in force from retrospective effect i.e. with effect from 01.04.2005, the day, the DVAT Act and DVAT Rules came into force. (Prashant Goyal) Commissioner, VAT VATO (Special Zon ..... X X X X Extracts X X X X X X X X Extracts X X X X
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