Work Contract under UPVAT Act

[Jasbir Uppal]

Dear professional bothers & sisters,

My client is dealing in the business of civil work contract & for consumption of material import the goods from outside Uttar Pradesh. As specified in the work order signed between the contractor and contracttee . The goods dispatched from outside state to the respective sites as compliance of Section 3 of CST Act,1956.

As per provisions of Rule 9 Determination of turnover of sale of goods involved in the execution of a works contract deducted all amounts representing the value of goods in which property has been transferred in the execution of the works contract as a result of sale in the course of interstate trade or commerce from the total amount.

Our question is when the appellant authorities allowed exemption on inter-state transaction under Rule 9(e) of UPVAT will the assessing officer would also have power to impose the tax on central sale after treating these transactions as central sale under section 29 sub section 9 of UPVAT act. Even if the assessing officer has allowed exempt transaction in his original central sale tax assessment order.

Please provide case laws.

With Regards

J.S.Uppal

Tax Consultant

AI Summary

Interstate goods in works contracts: exclusion from local turnover may be recharacterised, enabling reassessment under central sales tax provisions.
Whether value of goods purchased interstate and incorporated into a works contract may be excluded from taxable turnover under Rule 9(e) and whether an assessing authority can later treat those supplies as central sales and reopen assessment under the UP VAT Act are central. Rule 9(e) allows deduction of amounts representing value of goods sold in the course of interstate trade when determining works-contract turnover, while the UP VAT reassessment provision permits reopening where turnover is later held to relate to assessment under the Central Sales Tax Act or this Act.