Road marking paint is not civil works under Kerala sales tax law and does not qualify for compounded tax.

Supplying and applying thermoplastic road marking paint was held not to constitute civil works under section 7(7) of the Kerala General Sales Tax Act, 1963. The provision for compounded tax applies to contractors engaged in civil works, and its explanation covers construction, repair or maintenance of roads, while excluding certain improvement works on existing structures, including painting. Road marking was treated as a separate contract undertaken after completion of the road and as a traffic regulation measure for safe movement, not as an integral part of road construction. The assessee was therefore not entitled to compounding at the concessional rate.

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Issues: Whether supplying and applying thermoplastic road marking paint on a road constitutes civil works under section 7(7) of the Kerala General Sales Tax Act, 1963, so as to qualify for tax at the compounded rate.

Analysis: The provision permits compounding only for contractors in civil works, and the explanation includes construction, repair, or maintenance of roads while excluding specified improvement works on existing structures, including painting. The exclusion, however, applies to repair or maintenance-type work on existing structures and does not extend to work that is an integral component of the original construction contract. Road marking with paint was found to be done after completion of the road, under a separate contract, and as a traffic regulation measure for safe vehicular movement rather than as part of the road as a structure. The fact that a highway may not be opened for traffic until markings are made did not make the marking itself a component of road construction.

Conclusion: The road marking work is not civil works under section 7(7) of the Kerala General Sales Tax Act, 1963, and the assessee is not entitled to compounding at two per cent.

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