Works contract
d. chandra sekhar
(Querist) 24 October 2012
This query is : Resolved
Sir, please clarify the following issue regarding sales tax
My client executed painting work at Ravva offshore platform in the year2009-201 and 2010-2011. The value of the work is Rs. 5 Crores approx. During the execution of the work my client purchased materials and consumables for paining work. For transport of these materials and also labour from onshore to offshore, my client utilized the contractee Helicaptor service and the contractee recovered the charges for transport of these materials and labour from the amount paid to my client. The Sales Tax Officer, Kakinada disallow these amounts Rs. 1,56,00,000/- approx from the Gross Total Income and levied tax @ 14.5%. ( Client not opted composition and maintained books of accounts).
Sir, please clarify, whether this amount is allowable deduction under Rule 17 of APVAT Rules, 2005 or Not? If allowable, please give me relevant case laws.
If you want any further information, i will provide you
R K JAIN
(Expert) 25 October 2012
Transportation charges for labour will not be taxable but the transportation charges for goods will be taxable as per the judgment of Hon'ble Supreme Court in the case of M/s Gannon Dunkerley & Co. and others Vs State of Rajasthan 88 STC 204 SC.
