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M/s. GERDAU STEEL INDIA LTD., ANANTAPUR Versus THE ASST. COMMISSIONER, CT., ANANTAPUR, AND 5 OTRS.

2016 (8) TMI 1116 - ANDHRA PRADESH HIGH COURT

Levying tax at 4/5% on the contractee - failure to comply with Section 22 (3) of the Andhra Pradesh Value Added Tax Act 2005 in deducting TDS from the bills of the contractor - Held that:- On a conjoint reading of Rules 18 (1) (bc) and (bd), it is evident that the contractor is required to obtain Form-501-A from the Assistant Commissioner, and supply the same to the contractee; the contractee is required to complete the Form and supply the same to the contractor within fifteen days from the date .....

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ce, from their bills by the contractee, with the tax payable by them on their turnover. That does not absolve the contractee to deduct tax at source as it is a statutory obligation cast on them under Section 22 (3) of the Act. - Assessing authority, while examining whether a part of the turnover on which tax has been levied on the petitioner consists of Inter-State works contracts and pure service contracts, shall also consider whether, even in respect of local works contracts, the contracto .....

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d a personal hearing, pass orders afresh in accordance with law at the earliest, in any event within three months from the date of receipt of a copy of this order. - WRIT PETITION No.2708 of 2016 - Dated:- 9-2-2016 - SRI RAMESH RANGANATHAN AND SRI M.SATYANARAYANA MURTHY, JJ. FOR THE PETITIONER : LAKSHMI KUMARAN & SRIDHARAN FOR THE RESPONDENT : GP FOR COMMERCIAL TAX (AP) ORDER: (per Hon ble Sri Justice Ramesh Ranganathan) Aggrieved by the assessment order passed by the third respondent on 14. .....

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t, while the petitioner did not raise any contention, regarding their failure to deduct TDS from the bills of the contractor, before the assessing authority, they had put forward elaborate submissions, both oral and written, before the appellate authority, contending that the turnover, which was subjected to tax for failure to comply with Section 22 (3) of the Act, included Inter-State works contracts and pure service contracts, both of which fell outside the ambit of the provisions of the Act. .....

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,89,26,302/-, and the turnover relating to pure service contracts was ₹ 52,44,22,192/-; while the petitioner was fastened with a tax liability of ₹ 5,51,27,785/-, even if the local works contracts were to be subjected to tax, their tax liability would be only ₹ 2.06 Crores whereas they have already paid ₹ 4.27 Crores to the Department. Even with regards local works contracts, Learned counsel would draw attention of this Court to Rule 18 (1) (bc) of the Andhra Pradesh Valu .....

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he contractors, should be absolved of their tax liability as VAT, on the deemed sale of goods involved in the execution of local works contracts, had been levied on the contractors. While submitting that, in terms of Rule 18 (1) (a) of the Rules, the contractor ought to have made an application to the Assistant Commissioner for a provisional assessment, and their failure to do so obligated the petitoner to deduct tax at source in terms of Section 22 (3) of the Act, Sri S. Suri Babu, learned Stan .....

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to Inter-State works contracts and pure service contracts. The jurisdiction to levy tax under the Act is only on the deemed sale of goods involved in the execution of an intra-state works contract, and not on Inter-State works contracts and pure service contracts. If the contractor desired to have a provisional assessment made, for the turnover relating to local works contract, he should then have, in accordance with Rule 18 (1) (a) of the Rules, made an application for provisional assessment to .....

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Act i.e. Intra-State works contracts alone. Failure of the contractor to seek provisional assessment in terms of Rule 18 (1) (a) of the Rules would not fasten liability on the petitioner-contractee to deduct TDS on inter-state works contracts or pure service contracts, as the jurisdiction of the respondents to levy tax under the Act is only on Intra-State works contracts, and not on Inter-State works contracts or pure service contracts. We are, however, not impressed with the submission of Sri K .....

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ontractor within fifteen days from the date of each payment; and the contractor is required to submit Form-VAT-501 or Form VAT-501-A, duly certified by the contractee, together with Form VAT 200 by the 20th of the month, following the month in which the payment was received by them. On deducting tax at source from the bills of the contractor, the contractee is obligated to remit the tax deducted at source to the Government. Filing Form-501-A, along with their monthly returns, would enable the co .....

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