entry tax liabilty in karnataka

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B. Vasanth Shanker

Service

33 Points Joined February 2009

dear friends,

we have installed a auto-lpg dispensing station (lpg pump for vehicles). The work was executed by a contractor on a turn-key basis. He has issued us a consolidated bill mentioning it in the invoice as " providing auto-lpg dispensing facility" for a value of Rs. 35,00,000/- + VAT.

The contractor has caused the entry of some machines like LPG pump, LPG unloading pump, air compressor and dispensing machine and used them in the execution of contract ( installed at our site and included in the invoice value) costing around Rs. 11,00,000/-.

Is there a liability on our part for entry tax? or is the liability is on the contractor ?. Some say that the WC is not a sale but a deemed sale. hence we are not liable. there is no bill drawn on us which mentions the machinery seperately. Experts please advise.

thanks

vasanth shanker

Replies (2)

Prakash T c

Executive

194 Points Joined March 2011

kindly let me know what the contract agreement says, the machinery was imported by the way of sale bill . if so the sale bill made in your name.

Originally posted by : B. Vasanth Shanker

dear friends,

we have installed a auto-lpg dispensing station (lpg pump for vehicles). The work was executed by a contractor on a turn-key basis. He has issued us a consolidated bill mentioning it in the invoice as " providing auto-lpg dispensing facility" for a value of Rs. 35,00,000/- + VAT.

The contractor has caused the entry of some machines like LPG pump, LPG unloading pump, air compressor and dispensing machine and used them in the execution of contract ( installed at our site and included in the invoice value) costing around Rs. 11,00,000/-.

Is there a liability on our part for entry tax? or is the liability is on the contractor ?. Some say that the WC is not a sale but a deemed sale. hence we are not liable. there is no bill drawn on us which mentions the machinery seperately. Experts please advise.

thanks

vasanth shanker

B. Vasanth Shanker

Service

33 Points Joined February 2009

Dear Prakash,

thanks for responding.

The contractor has given us a consolidated bill including the cost of machineries. the machineries are not mentioned seperately in the bill. The machines are only a part of the dispensing facility created. The total dispensing facility includes setting up of pipelines, LPG storage tank , electrical connections,at our place, labour, inspection and certification charges by competent authority, which form a major value of the total bill amount(65%). The contract agreement is for setting up the facility at our place. the entry of macineries to support the creation of the total facility is is caused by the contractor. Can the assessing officer ask us to pay the entry tax on the entire bill?