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2015 (4) TMI 125 - HC - VAT and Sales TaxLevy of tax on activities considering the agreement as an integrated single composite contract - Composition tax under Section 15(1)(b) of the Karnataka Value Added Tax Act, 2003 - Held that:- It is clear that in a works contract involving transfer of goods and labour, tax is payable under Section 15(1)(b) on the total consideration of the works contract. If the labour contract is an individual contract involving only labour, no tax is payable. In the case on hand, the assessee has segregated the activities as per the work orders executed against the offer for erection and installation of WTGs. It is not the case of receiving labour related charges for executing pure labour work without transferring any property in goods. The entire contract, if perused as a whole, is in the nature of composite single integrated contract, though designed as it is four separate work orders. All the segregated activities are related to the very same project with the very same customer involving transfer of goods and labour. Apex Court while considering an identical provision in the case of Builders Association of India (1996 (11) TMI 355 - SUPREME COURT OF INDIA) under the provisions of Kerala General Sales Tax Act has categorically held that the alternate method of composition provided under composition tax is optional, there is no compulsion upon any contractor to opt for the alternate method of taxation and by opting to this alternate method, the contractor saves himself the botheration of book keeping, assessment, appeals and all that it means. The assessee having opted for the composition benefit voluntarily and with the full knowledge of the features of the alternate method of taxation, is liable to make the payment of tax on the total consideration of the works contract involving both labour and transfer of goods. Segregation of composite contract is not permissible under Section 15(1)(b) of the Act. Even if any segregation is made for the purpose of billing and separate invoices are raised towards each portion, it does not alter the nature of composite contract. - Tribunal on proper appreciation of the terms of the contract recorded a plausible finding that the contract executed by the assessee is a composite, single, integrated contract and all the four activities mentioned in the work orders as individual activities are intrinsically linked with each other and the main object is for the installation and commissioning of WTGs as per the offer letter. Thus, no interference is called for with the well-reasoned order passed by the Tribunal. - Decided against assessee.
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