Rule 3 - Works contract (Section 5(2))

Works contract valuation: exclude labour and service charges and value land by conveyance, circle rates, or construction value.

Taxable turnover for works contracts equals total contractual consideration but excludes charges for labour, services and other like charges and, in civil works, the cost of land subject to records. Joint development agreements value the contractor's supply by the highest of contractor book value of construction transferred, conveyance-stated value reduced by contractor payments, or notified circle rate reduced by such payments. Presumptive percentages apply where charges are unascertainable, and specific apportionment and timing rules apply for builders and intended purchasers, including tax on receipt of consideration and entitlement to input tax credit when output tax becomes payable.