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State of Kerala - Section

Section 10 in Kerala Value Added Tax Rules, 2005

10. Determination of taxable turnover.

(1)In determining the taxable turnover, the amounts specified in the following clauses shall, subject to the conditions specified therein, be deducted from the total turnover of the dealer: -
(a)[Omitted]
(b)all amounts allowed to purchasers in respect of goods returned by them to the dealer within a period of ninety days from the date of delivery of the goods, where the goods are taxable on the amount for which they have been sold, provided that the accounts show the date on which the goods were returned and the date on which and the amount for which refund was made or credit was allowed to the purchaser and the deduction is claimed during the year in which the sale was effected;
(c)all amounts received from the sellers in respect of goods returned to them by the dealer, where the goods are taxable under sub-section (2) of section 6, provided that the goods are returned within a period of ninety days from the date of delivery of the goods by the seller and the accounts show the date on which the goods were returned, the date on which the refund was made and the amount of such refund and the deduction is claimed during the year in which the sale was effected;
(d)all amounts for which goods specified in the first Schedule to the Act are sold;
(e)all amounts falling under the following heads, when specified and charged for by the dealer separately, without including them in the price of goods sold:
(i)freight
(ii)charges for delivery
(iii)cost of installation
(f)all amounts realised by a dealer by the sale of his business as a whole;
(g)all amounts for which goods are sold or purchased where such sale or purchase takes place in the course of export of the goods out of the territory of India or in the course of import of the goods into the territory of India or in the course of inter State trade or commerce;
(h)
(i)the turnover of sales or purchases made by a dealer through his agent in respect of which tax has been paid by the agent.
(ii)the turnover of sales or purchases made by an agent for and on behalf of any principal in respect of which tax has been paid by the principal
Provided that no such deduction shall be allowed unless the principal or agent claiming the deduction furnishes a declaration in Form No. 25F issued by the agent or principal, as the case may be.
(i)Omitted [SRO.385/2007]
(j)all amounts collected by way of tax under the Act, if shown separately in the bills.
(k)amount for which medicines and drugs falling under the Third Schedule is sold by a dealer where tax under clause(e) of section 8 had been paid in respect of such goods by any previous dealer:
Provided that no such deduction shall be allowed unless the dealer claiming such deduction obtains an invoice in Form 8H from the dealer who sold the goods to him with the declaration therein duly signed by the seller or his authorised signatory, which shall be produced for verification, as and when required, by any authority under the Act and also furnish a declaration in the following format before the assessing authority within fifteen days from the date on which the Kerala Value Added Tax (Amendment) Rules, 2005 is published and thereafter on or before the 30th day of April of the year to which the sales relate:DeclarationI/We........................(name and address of the dealer with TIN) hereby declare that the medicines and drugs in which I/we trade are either those in respect of which tax under section 8(e) was paid by the dealer who sold the goods to me or by any previous seller, or those in respect of which I/we shall pay tax under the said section.PlaceDateSignature and status of the authorised signatory
(Seal)Provided further that for the year 2005-06, the above declaration shall be applicable only in respect of the sales for the period from the date on which the Kerala Value Added Tax (Amendment) Act, 2005 (39 of 2005) was notified or for any subsequent period, where the dealer furnishes statement showing the particulars of medicine in respect of which tax had not been paid on the maximum retail price.
(l)amount for which goods specified under clause (b) of sub-section (7) of section 6 are sold to any industrial unit specified there under where the dealer claiming such deduction obtains a declaration in Form No.43 duly signed and sealed by the buyer and produces, on demand, for verification by any authority under the Act.
(m)the turnover of sales or purchases made by a dealer in respect of the goods coming under Fourth Schedule to the Act.
(2)
(a)In relation to a works contract in which transfer of property takes place not in the form of goods but in some other form, the taxable turnover in respect of the transfer of property involved in the execution of works contract shall be arrived at after deducting the following amount from the total amount received or receivable by the dealer for the execution of the works contract such as;
(i)labour charges for the execution of work,
(ii)charges for planning and designing and the architect's fee;
(iii)charges for obtaining on hire or otherwise, machinery and tools used for the execution of the works contract, or where the machinery is owned by the contractor, the interest paid on any loan taken for the purchase of the machinery;
(iv)cost of consumables used;
(v)cost of establishment and overhead charges of the dealer to the extent it is relatable to the supply of labour and service;
(vi)profit earned by the dealer to the extent it is relatable to supply of labour and services:
Provided that notwithstanding anything contained in clause (a) when the turnover arrived at after deducting the amounts mentioned in clause (a) falls below the cost of goods transferred in the execution of works contract, an amount equal to the cost of the goods transferred in the execution of works contract together with profit, if any, shall be the taxable turnover in respect of such works contract.Explanation. - For the purpose of the proviso, cost of goods means the price of goods together with all expenses incurred by the contractor in bringing the goods to the work site.
(b)Where the actual turnover in relation to a works contract, in which the transfer of goods takes place not in the form of goods but in some other form, is not ascertainable from the books of accounts of the dealer or where the dealer has not maintained any accounts, the total turnover in respect of such works contract shall be computed after deducting labour and other charges as given in the Table below from the total amount of contract.
Sl.No. Type of works contract Labour or other charges as a Percentage of thevalue of the works contract
(1) (2) (3)
1 Electrical Contracts 20
2 All structural contracts 30
3 Sanitary contracts 20
4 Tyre re-treading contract 50
5 Dyeing and Textile Printing contracts 50
6 Sculptural contracts or contracts relating toArts 70
7 Refrigeration, air conditioning or othermachinery, rolling shutters, cranes installation contracts 15
8 Installation of plant and machinery 15
9 Laying of pipes 20
10 Installation of elevators (lifts) and escalators 15
11 Installation of air conditioners and air coolers 10
12 Fixing of marble slabs, polished granite stonesand tiles (other than mosaic tiles). 25
13 Annual maintenance contract 50
14 All other contracts 25
Explanation. - No deduction as per the above Table shall be allowed out of the total contract amount for the supply and installation of any machinery, equipment or any other system, where the goods involved are transferred in the "knocked down" condition (unassembled form) and assembled and installed, and the skill and labour employed for installation is only incidental to the supply of such goods.