Tax on the Right to Use Any Goods Or Goods Involved in the Execution of Works Contract

Tax on the right to use any goods or goods involved in the execution of works contract (1) Notwithstanding anything contained in section 3 A or section 3AAA or section 3D but subject to the provisions of sections 14 and 15 of the Central Sales Tax Act, 1956, every dealer shall, for each assessment year, pay a tax on the net turnover of
(a) transfer of the right to use any goods for any purpose (whether or not for a specified period) for cash, deferred payment of other valuable consideration; or (b) transfer of property in goods (whether as goods or in some other form) involved in the execution of a works contract, at such rate not exceeding twenty per cent as the State Government may, by notification, declare and different rates may be declared for different goods or different classes of dealers.
(2) For the purposes of determining the net turnover referred to in sub-section (1), the following amounts shall be deducted from the total amount received or receivable by a dealer in respect of a
(a) transfer referred to in clause (a) of sub-section (1) whether such transfer was agreed to during that assessment year or earlier
(i) the amount representing the sales value of the goods covered by sections 3,4 and 5 of the Central Sales Tax Act, 1956;
(ii) the amount representing the value of the goods exempted under section 4;
(iii) the amount received as penalty for default in payment or as damages for any loss or damage caused to the goods by the person to whom such transfer was made, (b) transfer referred to in clause (b) of sub-section (1),
(i) the amount representing the sales value of the goods covered by sections 3,4 and 5 of the Central Sales Tax Act, 1956;
(ii) the amount representing the value of the goods exempted under section 4;
(iii) the amount representing the value of the goods on the sale or purchase whereof tax has been levied or is leviable under this Act at some earlier stage;
(iv) the amount representing the value of the goods manufactured in a new unit exempted under section 4A or section 4AAA;
(v) the amount representing the value of the goods supplied to the contractor by the contractee:
PROVIDED that the ownership of such goods remains with the contractee under the terms of the contract;
(vi) the amount representing the labour charges for the execution of the works contract;
(vii) all amounts paid to the sub-contractors as the consideration for execution of the works contract, whether wholly or in part:
PROVIDED that no deduction under this sub-clause shall be allowed unless the dealer claiming deduction produces proof that the sub-contractor is a registered dealer liable to tax under this Act and that such amount is included in the return of turnover filed by such sub-contractor under the provisions of this Act;
(viii) the amount representing the charges for planning, designing and architects fees;
(ix) the amount representing the charges for obtaining on hire otherwise machinery and tools used for execution of the works contract;
(x) the amount representing the cost of consumables used in the execution of the works contract, the property in which is not transferred in the execution of the works contract;
(xi) the amount representing the cost of establishment and other similar expenses of the contractor to the extent it is relatable to supply of labour and services;
(xii) the amount representing the profit earned by the contractor to the extent it is relatable to the supply of labour and services.
(3) Where in respect of transfer referred to in clause (b) of sub-section (1), the contractor does not maintain proper accounts or the accounts maintained by him are not found by the assessing authority to be worthy of credence and the amount actually incurred towards charges for labour and other services and profit relating to supply of labour and services are not ascertainable, such charges for labour and other services and such profit may, for the purposes of deductions under clause (b) of sub-section (2), be determined on the basis of such percentage of the value of the works contract as may be prescribed and different percentages maybe prescribed for different types of works contract.