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State of Rajasthan - Section

Section 22A in The Rajasthan Value Added Tax Rules, 2006

22A. [ Determination of taxable turnover in case of transfer of property in goods (whether as goods or in some other form) involved in the execution of a works contract. [Inserted by Notification No. S.O. 31, dated 14.7.2014 (w.e.f. 31.3.2006).]

(1)Notwithstanding anything contained in Rule 22, the taxable turnover for levying tax under sub-section (1) of section 4 of the Act. in case of transfer of property in goods (whether as goods or in some other form) involved in the execution of a works contract, may be determined by effecting the following deductions from the gross value of the contract, in so far as the amounts relating to the deductions pertaining to the said works contract,-
(a)on which no tax is leviable under the Act;
(b)which has been exempted from tax;
(c)labour and service charges for the execution of the works;
(d)charges for planning, designing and architect's fees;
(e)charges for obtaining on hire or otherwise, machinery and tools for the execution of the works contract;
(f)cost of consumables such as water, electricity, fuel used in the execution of works contract, where the property is not transferred in the course of execution of the works contract;
(g)cost of establishment of the contractor to the extent to which it is relatable to the supply of the said labour and services;
(h)other similar expenses relatable to the said supply of labour and services, where the labour and services are subsequent to the said transfer of property; and
(i)profit earned by the contractor to the extent it is relatable to the supply of labour and services:
Provided that where the contractor has not maintained accounts which enable a proper evaluation of the different deductions as above or where the assessing authority is of the opinion that accounts maintained by the contractor are not sufficiently clear and intelligible, or is considered to be unreasonable high in view of the nature of the contract, the deductions provided above shall be allowed by the assessing authority according to the limits laid down in Column 3 for the type of contract specified in Column 2 of the table given below:Table
S. No. Type of contract [Deduction in percentage of gross value of contract] [[Substituted 'Labour charges as a percentage of gross valueof contract' by Notification No. S.O. 175, dated 4.12.2015.]]
1 2 3
1 Fabrication and installation of plant andmachinery. 25
2 Fabrication and erection of structural works ofiron and steel including fabrication, supply and erection of irontrusses, purlins and the like. 15
3 Fabrication and installation of cranes andhoists. 15
4 Fabrication and installation of rolling shuttersand Collapsible gates. 15
5 Civil works like construction of buildings,bridges, roads, dams, barrages, canals and diversions. 30
6 Installation of doors, door frames, windows,frames and grills. 20
7 Supply and fixing of tiles, slabs, stones andsheets. 25
8 Supply and installation of air conditioners andair coolers. 15
9 Supply and installation of air conditioningequipments including deep freezers, cold storage plants,humidification plants and dehumidors. 15
10 Supply and fitting of electrical goods, supplyand installation of electrical equipments including transformers. 15
11 Supply and fixing of furniture and fixtures,partitions including contracts for interior decorators and falseceiling. 20
12 Sanitary fitting for plumbing and drainage orsewerage. 20
13 Laying underground or surface pipelines, cablesor conduits. 30
14 Supply and erection of weighing machines andweigh-bridges. 15
15 Painting, polishing and white washing. 25
16 All other contracts not specified from serialnumber 1 to 15 above. 25
Note. - The percentage is to be applied after deducting from the total value of the contract, the cost of land determined under sub-rule (3), if any, and the quantum of tax separately charged by the contractor if the contract provides for separate charging of tax.
(2)In case of construct ion contract, where along with the immovable property, the land or. as the case may he, interest in the land, underlying the immovable property is to be conveyed, and the property in the goods (whether as goods or in some other form) involved in the execution of the works contract is also transferred to the purchaser, such transfer is liable to tax under this rule. The value of the said goods at the time of transfer shall be calculated after making the deductions under sub-rule (1) and the cost of the land as determined under sub-rule (3) from the total value of agreement.
(3)The cost of the land shall be determined in accordance with the rates as recommended or determined under Rule 58 of the Rajasthan Stamps Rules, 2004, as applicable on the 1st January of the year in which the agreement to sell the property is made.
(4)Where the dealer who undertakes the construction of flats, dwellings or buildings, premises and transfers them in pursuance of an agreement along with the land or interest underlying the land, then after deductions under sub-rule (1) and (3) from the total agreement value, the sale price shall be determined depending upon the stage at which the agreement with the purchaser is entered, according to the limits laid down in Column 3 for the type of contract specified in Column 2 of the table given below:Table
S. No. Stage at which the developer enters into acontract with the purchaser Amount to be determined as value of agreement1
1 2 3
1 Up to completion of plinth level 95.00%
2 From plinth level to completion of 100% RCCframework. 85.00%
3 From completion of RCC framework to OccupancyCertificate 55.00%
4 From Occupancy certificate till the completionof construction. Nil
(5)The value of goods so arrived at under sub-rule (1) shall, for the purpose of levy of tax, be the sale price or, as the case may be, the purchase price relating to the transfer of property in goods (whether as goods or in some other form) involved in the execution of works contract.
(6)Where a works contractor who has exercised option of exemption fee under a notification issued under sub-section (3) of section 8 of the Act or has opted for payment in lump sum in lieu of tax, awards whole or part of such contract to a sub-contractor, while determining the taxable turnover of sub-contractor apart from deduction provided under sub-rule (1), the turnover of transfer of property in goods involved in execution of such subcontract, shall be deducted:Provided that [where the contractor has opted for Option A under notification number F. 12(23) FD/Tax/2015-206 dated 09.03.2015] the sub-contractor shall purchase goods used in the execution of the work contract, from a registered dealer of the State, and in case of use of any goods in the execution of the work contract, which is procured or purchased from a dealer other than the registered dealer of the State, the sub-contractor shall be liable to pay an amount equal to the amount of tax that would have been payable had the goods been purchased in the State from a registered dealer.]