The Jharkhand Value Added Tax Rules, 2006
Determination of Taxable Turnover for the purpose of the Act

Body 22. Determination of Taxable Turnover of Goods involved in Works Contract for the purpose of sub-section (4)(c) of Section 9 :-

1.(a) The works contractor VAT Dealer shall be liable to pay tax at the appropriate rates, on the total value of goods, transferred in property (either in the same Form or in other Form) involved in execution of works contract.

(b) When such registered VAT dealer, who is a contractor, and where he awards any part or whole of his contract to any registered sub-contractor, for transfer of property in goods (whether as goods or in some other form) involved in the execution of a works contract; such registered contractor shall deduct the turnover of such registered sub-contractor; from his turnover .

Provided the registered contractor shall issue the prescribed Declaration in Form JVAT 412 to such registered sub-contractor; and such registered subcontractor shall also issue the prescribed Form in Form JVAT 413; to such registered contractor.

Provided further the registered contractor and the sub-contractor, within thirty days of issue and receipt of such Declarations in Form JVAT 412 and the Form JVAT 413: shall forward the copy of such prescribed Declarations, to the circle(s) where they are registered.

(c) The value of the goods used in execution of work in the contract, declared by the contractor shall not be less than the purchase value and shall include total consideration contract charges, including blasting and breaking charges, crusher charges, loading, transport and unloading charges, stacking and distribution charges, expenditure incurred in relation to hot mix plant and transport of hot mix to the site and distribution charges.

(d) The value of goods involved shall be taxable after deducting from it, the following charges, such as: -

(i) Labour charges for execution of the works;

(ii) Charges for planning, designing and architect fees;

(iii) Charges for obtaining on hire or otherwise machinery and tools used for the execution of the works contract;

(iv) Cost of consumables such as water, electricity, fuel, etc., used in the execution of the works contract, the property in which is not transferred in the course of execution of a works contract;

(v) Cost establishment of the contractor to the extent it is relatable to supply of labour and services;

(vi) Other similar expenses relatable to supply of labour and services;

(vii) Profit earned by the contractor to the extent it is relatable to supply of labour and services.

(viii) Cost of land determined under sub rule (1A).

(1A) In case of a developer/Builder in respect of his own share of construction where along with the immovable property, the land or, as the case may be, interest in the land, underlying the immovable property is to be conveyed, and the property in the goods (whether goods or in some other form) involved in the execution of the construction contract is also transferred to the purchaser, such transfer is liable to tax under this rule. The value of the said goods at the time of the transfer shall be calculated after deduction of the cost of the land from the total agreement value. The cost of the land shall be determined in accordance with the guidelines determined by any authority of the state Govt. for the purpose of payment of stamp duty in respect of transfer and/or registration of such land, as applicable on the date on which the agreement to sell the property is executed.

Provided that after payment of the tax of the value of the goods determined as per this rule, it shall be open to the dealer to prove before the prescribed authority that actual cost of land is higher than the value determined by the State Government authority for the purpose of payment of stamp duty and registration of agreement, as applicable in the State of Jharkhand on the date of agreement to sale and the actual cost of land, being proved to be higher, the higher cost of land will be deductible and the excess tax paid, if any, shall be refunded/adjusted.

(1B) (a) When the developer/Builder, in respect of his own share, undertakes the construction of flats, dwelling, building of premises and transfers them in pursuance of an agreement along with the land or interest underlying the land then, after deduction under sub-rule (1) and (1A) from the total contract price, the value of the goods involved in the works contract shall be determined after applying the percentage provided in column (3) of the following TABLEdepending upon the stage at which the purchaser entered into contract.

Sl.	Stage during which the developer enters into a contract with the purchaser.	Amount to be determined as value of goods involves in works contract
1	2	3
a)	Before issue of the Commencement Certificate	100%
b)	From the Commencement Certificate to the completion of plinth level	95%
c)	After the completion of plinth level to the completion of 100% RCC framework.	85%
d)	After the completion of 100% RCC framework to the Occupancy Certificate.	55%
e)	After the Occupancy Certificate	Nil

(b) For determining the value of goods as per the Table clause (a), it shall be necessary for the developer/Builder to furnish a certificate from the concerned authority of the State Government certifying the date of completion of the stages referred above.

The above certificate shall be subject to the verification of the prescribed authority.

(1C) If the dealer fails to establish the stage during which the agreement with the purchaser is entered, then the entire value of goods as determined after deductions under sub-rule (1) and (1A) from the value of the entire contract shall be taxable.

(1D) The value of goods so arrived at under sub-rule (1), (1A), (1B) or, as the case may be, under sub-rule (1C) shall, for the purposes of levy of tax, be the sale price or, as the case may be, the purchase price relating to the transfer of property in goods (whether as goods or in some other form) involved in the execution of a works contract.

2. Where the amount of charges towards the labour, services, hire charges or all other like charges in any contract are not ascertainable, from the terms and conditions or the accounts furnished in this behalf of the contract, the amount of such charges shall be calculated at the following percentages: -

Sl. No.	Type of contract	Percentage of the total value eligible for deduction
1.	(a) Electrical Contracts. (i) H.T. Transmission lines (ii) Sub-station equipment (iii) Power house equipment and extensions (iv) 11 and 22 KV and L.T. distribution lines 12+5 (v) All other electrical contracts (b) All structural contracts	Twenty percent Fifteen percent Fifteen percent Seventeen percent Twenty five percent Thirty five percent
2	Installation of plant and machinery	Fifteen percent
3	Fixing of marble slabs, polished granite stones and tiles (other than mosaic tiles)	Twenty five percent
4	Civil works like construction of buildings, bridges roads etc	Thirty percent
5	Fixing of sanitary fittings for plumbing, drainage and the like	Fifteen percent
6	Painting and polishing	Twenty percent
7	Laying of pipes	Twenty percent
8	Tyre re-treading	Forty percent
9	Dyeing and printing of textiles	Forty percent
10	Printing of reading material, cards, pamphlets, posters and office stationery	Forty percent
11	All other contracts	Thirty percent

Provided, where such contractor VAT dealer has not maintained the accounts to determine the correct value of the goods at the time of incorporation, he shall pay tax at the rate of fourteen percent (14%) on the total consideration received or receivable; subject to the deductions specified in the table aforesaid.

3. Where a works contractor is permitted to pay lump-sum amount or Composition of Tax under Section 22 or 58 respectively of the Act, the provisions of this Rule shall not apply in such cases.

(4) Notwithstanding anything contained in the Rules, the word and punctuations wherever appearing in the Rules as, at the rate of twelve and a half percent (12.5%) or 12.5% as the case may be, shall be deemed to be treated as, w.e.f. 07.05.2011 as at the rate of fourteen percent (14%) or the rate as specified in Schedule II Part-D of the Act.