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2023 (10) TMI 346 - HC - VAT and Sales TaxRejection of Petitioner’s claim of deduction/exemption on Prime Location charges - works contract or not - HELD THAT:- Undisputed facts of the case are, assessee is engaged in the business of development and construction of residential apartments. Assessee has collected PLC and FRC from the buyers and discharged the service tax payable on PLC/FRC. The estimate and actual cost of construction depends upon the material used for construction. The cost of construction shall be the same without reference to the direction of the flat, the view from a particular flat vis-à-vis the other flat situated on the same floor. The PLC/FRC are based on the choice of buyer and cannot be treated as cost of construction. For example, a flat situated on a higher floor over-looking a garden or seashore shall have better locational advantage than the flat in the same floor from where the garden or the seashore may not be visible. Nonetheless the cost of construction of both flats situated in a particular floor shall be the same. By definition, ‘works contract’ does not include preferential location. Therefore the Revenue rejecting assessee’s request to exempt PLC/FRC from payment of KVAT is not sustainable in law. These revision petitions are allowed.
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