Assessee is eligible to claim concession rate of taxes in respect of plant, machinery and other items used in execution of Works contract by including the same in CST registration certificate
Nagarjuna Construction Co. Ltd. Vs. Assistant Commissioner of Commercial Taxes [2015 (64) taxmann.com 323 (Calcutta)]
Nagarjuna Construction Co. Ltd. (“the Petitioner”) was engaged in the business of Works contracts such as construction of bridges, flyovers, roads and multi-storied buildings across the India.Being a Works contractor, the Petitioner applied for registration under the CST Act and also claimed CST registration in respect of machinery, tools and equipment such as hydraulic mobile cranes, concrete mixers, welding machines, pumps, computers, vehicles, etc., (“the goods”) used for execution of Works contracts, so that it can be purchased at concessional rate of taxes in terms of Section 8(3)(b) read with Rule 13 of CST Rules.
Since these items were merely used in the execution of Works contract and were not transferred to the contractee, the Department denied inclusion of the goods in CST registration certificate.
The Hon’ble High Court of Kolkata relied upon the following case laws:
- Indian Copper Corpn. Ltd. CCT [(1965) 16 STC 259 (SC)];
- K. Cotton Spg. &Wvg. Mills Co. Ltd. v. STO [(1965) 16 STC 563 (SC)];
- Chowgule& Co. Pvt. Ltd. Union of India [(1981) 47 STC 124 (SC)] and
- Member, Board of Revenue, West Bengal Phelps and Co. (P.) Ltd. [(1972) 29 STC 101 (SC)]
And held that there is plethora of legal pronouncements wherein the Hon’ble Supreme Court has held that the goods were eligible for inclusion in the CST registration certificate as much as the same were used in the manufacturing goods for sale. Hence, it was held that the goods were integral to the process of the manufacture, thus eligible for concessional tax even though such goods may not actually be incorporated in execution of the Works contract. Hence, in regard to scope of the provisions of Section 8(3)(b) of the CST Act and Rule 13 of the CST Rules, the goods which was used for the execution of Works contracts were eligible for inclusion in CST registration certificate.