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Works Contract for Supply and Installation of Machinery

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2016-VIL-531-GUJ

STATE OF GUJARAT Vs DRESSER RAND INDIA PVT LTD

Gujarat Sales Tax Act - Section 2(29) – Rule 44 - sale price – set-off – packaging material - works contract for supply and installation of machinery - levy of tax on performance test/inspection of goods treating the same as part of sale price – admissibility of set off on packing materials used for delivery of the product

  • HELD - sale price means the amount of valuable consideration paid or payable to a dealer for any sale made including any sum charged for anything done by the dealer in respect of the goods at the time of or before delivery thereof other than the cost of insurance for transit or of installation when it is separately charged.
  • In the present case, the test performed for the inspection was neither done by the assessee nor was charged by the assessee and would therefore not be included in the expression “any some charged for anything done by the dealer in respect of the goods” - when there is no independent sale of packing material but the value of the packing material goes into determining the value of the goods sold, the deeming fiction provided under Section 6(C) of the Act would apply and even the value component of packing material would be taxed at the same rate as the goods themselves
  • Rule 44 envisages the drawback, set off, or refund of tax at prescribed rates of purchase of goods sold in course of intra-state trade etc. In the present case, such conditions are satisfied and therefore the set off would be available – Tribunal order is upheld and revenue appeal dismissed
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