TaxTMI 
TaxTMI 
TaxTMI 
2021 (10) TMI 1073
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....ing questions of law: "1. Whether the Tribunal was right in holding that bank charges, guesthouse charges, fuel charges, computer expenses, and entertainment charges incurred by the respondent as permissible deductions for the purpose of computing the respondent's taxable turnover under the provisions of the KVAT Act and Rules? 2. Whether the Tribunal was right in holding that bank charges, guesthouse charges, fuel charges, computer expenses, and entertainment charges incurred by the respondent are "establishment expenses" relatable to "labour and other like charges" and are, therefore, eligible to be deducted from the respondent's turnover under Rule 3 (2) (l) of the KVAT Rules? 3. The assessee-respondent is a dealer registered....
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....ion with the execution of works contract including charges incurred for erection, installation, fixing, fitting out or commissioning of the goods used in the execution of a works contract are eligible to be deducted from the dealer's total turnover to arrive at the taxable turnover. The expression 'labour and other like charges' for the purpose of Rule 3 (2) (l) has been defined to include charges for obtaining, on hire or otherwise, machinery and tools used in the execution of a works contract, charges for planning, designing and architect's fees, cost of consumables used in the execution of the works contract, cost of establishment to the extent relatable to supply of labour and services. Thus, the expenses incurred by the assessee toward....
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....nover: (1) ... (2) (l) all amounts actually expended towards labour charges and other like charges not involving any transfer of property in goods in connection with the execution of works contract including charges incurred for erection, installation, fixing, fitting out or commissioning of the goods used in the execution of a works contract." Explanation II for the purpose of clause (l) reads thus: "labour and other like charges" include charges for obtaining, on hire or otherwise, machinery and tools used in the execution of a works contract, charges for planning, designing and architect's fees, cost of consumables used in the execution of the works contract, cost of establishment to the extent relatable to supply of labour and se....
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....hich is not transferred in the course of execution of a works contract; f) Cost of establishment of the contractor to the extent it is relatable to supply of labour and services; g) Other similar expenses relatable to supply of labour and services; and h) Profit earned by the contractor to the extent it is relatable to supply of labour and services." The expenses now claimed by the assessee would certainly fall under clauses (e), (f), (g) and (h) enumerated therein. 10. In the case of Voltas Limited (supra), the Hon'ble Apex Court has held that not merely the labour charges are deductible from the value of works contract, but all other charges/amounts relatable therein, except the value of the goods sold in the execution of works co....