Government of Andhra Pradesh s12

GOVERNMENT OF ANDHRA PRADESH REVENUE (CT) DEPARTMENT

Memo.No.31897/CT.II(1)/2009-2 Dated:5/11/2009.

Sub: APVAT Act, 2005 – Request of Variegate Projects (P) Limited for execution of work contract to Government – Clarification – Orders – Issued.

Ref: 1. From the CM’s Office, CMP No.1231/CMP/2009, dt.3-7-2009 along with representation of MD, Variegate Projects (P) Limited, dt.Nil. 2. Govt.Memo.No.31897/CT.II(1)/2009-1, dt.6-8-2009. 3. From the CCT, Ref.No.AIII(3)/214/2009, dt.5-10-2009. -OOO-

In the reference 1st cited, the Managing Director, Variegate Projects (P) Limited have stated that as per entry 116 of Schedule IV of APVAT Act, 2005, the sale of goods to Government Department is liable to tax @4%. The transfer of property taking place in the course of execution works contract is considered as sale. As for Section 4(7) (a) of the APVAT Act, 2005, the rate of tax for the goods involved in the execution of works contract is 4%. They further stated that certain Department officers are interpreting that entry 116 cannot be applied to sale taking place in the course of execution of works contract and requested the Government for clarification in the matter. 2. The Commissioner of Commercial Taxes who was consulted in the matter, has furnished her report vide reference 3rd cited. 3. Government, after careful examination of the matter, hereby clarify that sale of goods, enumerated under Schedule-IV at entry 116 to the Government Departments and APGENCO, APTRANSCO and other Discoms, as a chattel as chattel alone are liable to tax @4%. Deemed sales of goods through execution of works contracts is liable to tax at the rates applicable to the commodities goods that are transferred in the execution of works under sub-subsection 7(a) of section 4 of the APVAT Act. Thus the rate of tax for execution of works contracts either to the Government Departments or other contractors is at 4% under composition but for non-composition cases it is liable to tax at the rates applicable to such goods under the APVAT Act.

4. The Commissioner of Commercial Taxes is therefore requested to take necessary action in the matter.

AUSTOSH MISHRA PRINCIPAL SECRETARY TO GOVERNMENT

To The Commissioner of Commercial Taxes, Hyderabad.

//forwarded:: by order// Sd/-xxxxxxx Section Officer.