9911796707
TMI Blog2015 (4) TMI 125X X X X Extracts X X X X X X X X Extracts X X X X ..... the Karnataka Value Added Tax Act, 2003 (hereinafter referred to as 'the Act' for brevity), carried out the activity of laying down civil foundations, installation of electrical components for wind turbine generator (WTG), erection and commissioning of WTG. The petitioner has opted for composition under Section 15 of the Act for the assessment period September 2006 to March 2007, May 2007, June 2007 and August 2007. The WTGs which are undertaken for erection and commissioning are manufactured by its group company viz., M/s Suzular Energy Limited. The WTGs so purchased by the customers are installed in a particular place earmarked by State Nodal Agency. Such customers in turn entered into agreements with the petitioner-company as per ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... TG supplied by the customer, which is purely labour contract, the assessee having discharged the service tax liability is not liable to pay the composition tax under Section 15(1)(b) of the Act. The learned counsel placed reliance on the Judgment of this Court reported in H S Chandrashekar Hande vs State of Karnataka (2012(72) KLJ 116) 7. Per contra, the learned counsel Sri K M Shivayogiswamy appearing for the revenue supported the order passed by the Tribunal and sought for the dismissal of the revision petition placing reliance on the judgment of the Apex Court in the case of STATE OF KERALA vs BUILDERS ASSOCIATION OF INDIA (104 STC 134). 8. Section 15(1)(b) of the Act reads thus: 15(1)(b): Composition of tax (1) Subject to such condi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ices required for the erection and installation of 1 WTG (S 66 - 1250 KW) at your proposed wind farm in Karnataka using your materials. Please note that this offer is the lowest possible proposal for your esteemed organization to have a long lasting and mutually beneficial relationship with your good self". Annexure I - Quotation; Clause 6 of Annexure II - Terms and Conditions which reads as under: INSURANCE We will take suitable insurance policy for storage & erection during the erection period of the WTGs. This insurance shall cease once the WTGs are commissioned. The Fire & Allied Perils, Earthquake & Third party risk policy will be taken by you as soon as the WTG is commissioned at your project site. Scope of Work @ Annexure III re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... labour work also. 12. The Tribunal has considered the work orders which are consequent to the offer for the services required for installation, erection and commissioning of WTG with invoice copy. It is also noticed that the WTGs do not come in the assembled manner but rather they are supplied by the customers as turbine, rotors and blades which are to be carried to the site where the assessee has to compulsorily make civil foundation followed by electrical work and then only has to erect and install WTG which is an integral activity. 13. This Court, while considering the issue of composition tax under Section 17(6) of the Karnataka Sales Tax Act which is in pari materia with Section 15(1)(b) of the Act in H S CHandrashekar Hande's ca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e component is only labour, no tax is payable". 14. Thus 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. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the assessee falls under the definition of 'taxable services' amenable to levy of service tax, the assessee cannot be absolved from the liability of composition tax under Section 15(1)(b) of the Act. 17. The 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. 18. Accordingly, the revision petitions filed ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
