Karnataka vat
This query is : Resolved
08 June 2012
In works contract we are supplying and instolling the motor pump for irrigation project is it taxable for at 5% instead of 14% as per Sixt Schedule
SARATHY RP
(Expert)
11 June 2012
There are many ways in approaching this question.
1. If you have undertaken a large works contract (including civil,piping, etc.) under which installing the pump also is a portion, then you have to go by the nearest sixth schedule classification.
2. If you have taken an exclusive job (without any cross fall breach clause to some other works contract) ONLY for the installation of pump for irrigation project, then, predominantly, the nature of such contract is supply and the installation is only ancillary / incidental. In such case you may charge 5% KVAT on the value of supply of pumpsets and on the balance service tax (depending upon the end user).
3. The second point above will be handy, if you look at the intention of the legislature to tax 5% VAT on Irrigation PUmpsets. The idea is to give benefit of lower tax, considering the end purpose.
1. If you have undertaken a large works contract (including civil,piping, etc.) under which installing the pump also is a portion, then you have to go by the nearest sixth schedule classification.
2. If you have taken an exclusive job (without any cross fall breach clause to some other works contract) ONLY for the installation of pump for irrigation project, then, predominantly, the nature of such contract is supply and the installation is only ancillary / incidental. In such case you may charge 5% KVAT on the value of supply of pumpsets and on the balance service tax (depending upon the end user).
3. The second point above will be handy, if you look at the intention of the legislature to tax 5% VAT on Irrigation PUmpsets. The idea is to give benefit of lower tax, considering the end purpose.
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