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TMI Blog2011 (2) TMI 1324X X X X Extracts X X X X X X X X Extracts X X X X ..... ated that they are not directly executing contracts and they are engaging sub-contractors who are registered and remitting tax, we are not dealing with tax liability of the appellants in relation to sub-contractors which is a matter to be considered in the course of making assessment by making appropriate claims of exclusions, rebates or set-off applicable in respect of sub-contracts. - O.T. Appeal Nos. 6, O.T. Appeal Nos. 7 of 2010 - - - Dated:- 7-2-2011 - RAMACHANDRAN NAIR C.N. AND RAY B.P. JJ. C.A. Sadasivan, Joy P. Jose, Sojan Mathew, K.N. Krishnan Namboothiri, Emily Andrews, C.V. Sasi, K. Jayamohanan Pillai and K.I. Mayankutty Mather for the appellants Vinod Chandran, Special Government Pleader , for the respondents J ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... over this and to levy full stamp duty on the value of the land and building, the amendment was introduced. In fact, the amendment provides for payment of stamp duty on the agreement itself whereunder construction of the flat or villa is agreed upon between the parties. However, when sale deed is executed, the parties are granted rebate of stamp duty paid on the agreement. In other words, the construction of flat or villa and transfer under agreement ultimately involves payment of full stamp duty on the value of the land or undivided right in land as the case may be and on the value of the building together. The Government issued notification SRO No. 676/2007 under section 9(l)(a) of the Kerala Stamp Act, providing for rebate of value add ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e above referred, we have gone through the said judgment. The Special Government Pleader appearing for the State and tax authorities contended that in fact a review was filed only to clarify the position regarding tax liability under the KVAT Act and the same was closed because the matter was already pending in the Supreme Court. Both the counsel appearing for the appellants took us to the observations of this court with regard to the liability of works contractors to pay stamp duty. According to the appellants, these observations are such that they are exonerated from payment of tax under the KVAT Act. However, after going through the judgment, we do not find the High Court having considered any of the provisions of the KVAT Act or the lia ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tax paid in respect of the works contract entered into between a promoter or developer, by whatsoever name called for construction, development or sale or transfer (in any manner whatsoever) of any immovable property and the purchases whichever is less provided such payment of value added tax payment is described in the instrument of conveyance on the basis of certificate issued by competent authority under the Kerala Value Added Tax Act, 2003 (30 of 2004). Explanatory Note:- (This does not form part of the notification, but is intended to indicate its general purport.) Government have decided to reduce the stamp duty on instruments of conveyance relating to flats/apartments to give set off of the value added tax paid in res ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... whatever be the practical difficulty in implementing the above notification, so far as appellants are concerned, both of them have not paid full stamp duty on the agreements executed and admittedly as of now they have not executed any sale deed as well. So much so, according to him, the appellants are bound to pay sales tax payable under the KVAT Act on works contract executed by them and grievance if any for them will be only when they are called upon to pay stamp duty at the time of execution of sale deeds to the purchasers which is on the entire value of the land or undivided right in land together with the value of the building. After hearing both sides, we feel there is a practical difficulty in the implementation of SRO No. 676/20 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... her full stamp duty is paid on agreement and if so, to grant waiver to the extent of tax admissible under SRO No. 676/2007 and recover only balance sales tax payable under the VAT Act. The appeals are accordingly disposed of with direction to the Government to issue appropriate notification as stated above so that those who pay the stamp duty in advance on agreement, also get the benefit of rebate under SRO No. 676/2007 while remitting sales tax under the VAT Act. The contention of the Special Government Pleader that liability for tax under the VAT Act and liability for stamp duty under the Stamp Act are entirely different is perfectly correct. However, we have moulded the above relief only to avoid discrimination against those who pay stam ..... X X X X Extracts X X X X X X X X Extracts X X X X
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