Supreme Court on 'Works Contract': Analysis and Ramifications of 'Larsen & Toubro' Decision
Supreme Court of India; London School of Economics & Political Science (LSE); National Law University Jodhpur (NLUJ)
October 14, 2013
Excise and Customs Reporter, Vol. 200 (November 2013)(pp. 1SF-18SF).
In a recent decision of the Supreme Court in "Larsen & Toubro Ltd." has put to rest the dispute relating to the correctness of the "K. Raheja Development Corporation" and the distinction between a contract of sale and a works contract. This decision seeks to settle, after revisiting the tremulous legal position of the last five decades, the ever unending disputes on the classification of agreements between those of "contract of sale" and "works contract".
Repelling the challenge by the distraught buyers of flats and buildings, who suffer from the ever-expanding regime of fiscal legislations, the verdict is in favour of the State Governments vindicating their hitherto challenged exercise of power to levy sales tax/value added tax on sale of immovable property purporting to be sale of goods involved in construction of such property. This article examines the dispute addressed by the decision, the legal position emanating therefrom and its implications in sales tax/value added tax and other fiscal legislations.
Number of Pages in PDF File: 18
Keywords: Works Contract, Sales Tax, Value Added Tax, Service Tax, India
JEL Classification: H21, H23, H25, H32, H39, H71, K34
Date posted: November 11, 2013
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