Maharashtra Value Added Tax Rules, 2005
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Body 58. Determination of sale price and of purchase price in respect of Sale by transfer of property in Goods (whether as good or in some other form) involved in the execution of a works contract

(1) The value of the goods at the time of the transfer of property in the goods (whether as goods or in some other form) involved in the execution of a works contract may be determined by effecting the following deductions from the value of the entire contract, in so for as the amounts relating to the deduction pertain to the said works contract:-

(a) labour, service tax collected separately and service charges for the execution of the works;

(b) amounts paid by way of price for sub-contract, if any, to sub-contractors;

(d) charges for obtaining on hire or otherwise, machinery and tools for the execution of the works contract;

(e) cost of consumables such as water, electricity, fuel used in the execution of works contract, the property in which is not transferred in the course of execution of the works contract;

(f) cost of establishment of the contractor to the extent to which it is relatable to supply of the said labour and services;

(g) other similar expenses relatable to the said supply of labour and services, where the labour and services are subsequent to the said transfer of property;

(h) profit earned by the contractor to the extent it is relatable to the supply of said labour and services:

Provided that where the contractor has not maintained accounts which enable a proper evaluation of the different deductions as above or where the Commissioner finds that the accounts maintained by the contractor are not sufficiently clear or intelligible, the contractor or, as the case may be, the Commissioner may in lieu of the deductions as above provide a lump sum deduction as provided in the Table below and determine accordingly the sale price of the goods at the time of the said
transfer of property.

TABLE

*Sr.No.*	*Type of Works contract*	*Amount to be deducted from the contract price (expressed as a percentage of the contract price)
(1)	(2)	(3)
1	Installation of plant and machinery	Fifteen per cent
2	Installation of air conditioners and air coolers	Ten per cent
3	Installation of elevators (lifts) and escalators	Fifteen per cent
4	Fixing of marble slabs, polished granite stones and tiles (other than mosaic tiles)	Twenty five per cent
5	Civil works like construction of buildings,bridges, roads, etc.	Thirty per cent
6	Construction of railway coaches on under carriages supplied by Railways	Thirty per cent
7	Ship and boat building including construction of barges, ferries, tugs, trawlers and dragger	Twenty per cent
8	Fixing of sanitary fittings for plumbing, drainage and the like	Fifteen per cent
9	Painting and polishing	Twenty per cent
10	Construction of bodies of motor vehicles and construction of trucks	Twenty per cent
11	Laying of pipes	Twenty per cent
12	Tyre re-treading	Forty per cent
13	Dyeing and printing of textiles	Forty per cent
14	Annual Maintenance contracts	Forty per cent
15	Any other works contract	Twenty five per cent

*Note : The percentage is to be applied after first deducting from the total contract price the cost of land determined under sub-rule (1A) and then, the quantum of price on which tax is paid by the sub-contractor, if any, and the quantum of tax separately charged by the contractor if the contract provides for separate charging of tax.

(1A) In case of a construction contract, where alongwith 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 as 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 appended to the Annual Statement of Rates prepared under the provisions of the Bombay Stamp (Determination of True Market Value of Property) Rules, 1995, as applicable on the 1st January of the year in which the agreement to sell the property is registered.

Provided that, after payment of tax on the value of goods, determined as per this rule, it shall be open to the dealer to prove before the Department of Town Planning and Valuation that the actual cost of the land is higher than that determined in accordance with the Annual Statement of Rates (including guidelines) prepared under the provisions of the Bombay Stamp (Determination of True Market Value of Property) Rules, 1995. On such actual cost being proved to be higher than the Annual Statement of Rates, the actual cost of the land will be deducted and excess tax paid, if any, shall be refunded.

(1B)(a) Where the dealer undertakes the construction of flats, dwellings, buildings or premises and transfers them in pursuance of an agreement along with the land or interest underlying the land then, after deductions under sub-rules (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 TABLE depending upon the stage at which the purchaser entered into contract.

Table

Sr. No.	Stage during which the developer enters into a contract with the purchaser.	Amount to be determined as value of goods involved 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% of 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 of clause (a), it shall be necessary for the dealer to furnish a certificate from the Local or Planning Authority certifying the date of completion of the stages referred above and where such authority does not have a procedure for providing such certificate then such certificate from a registered RCC consultant.

(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-rules (1) and (1A) from the value of the entire contract, shall be taxable.

(2) The value of goods so arrived at under sub-rule(1), (1A) or, as the case may be, under sub-rule (1B) 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.