Pest control service contract not treated as sale where chemicals were only incidental to service performance.

A pest control contract was held to be a pure service arrangement because the dominant object was pest and rodent control, with pesticides and chemicals used only incidentally in performance of the service. The materials were consumed in the process and no tangible goods remained capable of transfer. Accordingly, there was no transfer of property in goods, either as goods or in any other form, within Article 366(29A)(b) or the Gujarat Value Added Tax Act, 2003, and the contract was not exigible to value added tax.

---

---

Issues: Whether a pest control contract involved transfer of property in goods so as to fall within the definition of sale and attract value added tax under the Gujarat Value Added Tax Act, 2003 and Article 366(29A)(b) of the Constitution of India.

Analysis: The contract was for pest control services requiring specialised skill, supervision, and use of pesticides and chemicals in prescribed measures. The use of such materials was incidental to the rendering of service. On the terms of the work order, the dominant object was to provide pest control and rodent control service, not to sell the chemicals as goods. The materials were consumed in the process and nothing tangible remained capable of transfer. In such circumstances, the transaction did not involve transfer of property in goods, either as goods or in some other form, within the expanded concept of sale under Article 366(29A)(b) or under section 2(23) of the Gujarat Value Added Tax Act, 2003.

Conclusion: The pest control contract was a pure service contract and was not exigible to value added tax.

---