Notification No.63/GST-2 Removal of Difficulties Order under the third proviso to sub – section (2) of section 174 under the HGST Act, 2017.

For the removal of difficulties, it is hereby clarified that as per the clause (i) of sub-rule (7) of rule 25 of the Haryana Value Added Tax Rules, 2003, for determining the taxable turnover of sale, the cost of material and other labour/services and like charges incurred in the execution of works contract before entering into the agreement with the intended purchaser, shall also be reduced besides the already provided deductions from the total value of agreement.

HARYANA GOVERNMENT
EXCISE AND TAXATION DEPARTMENT
ORDER

The 10th November,2021

No. 63/GST-2. – Whereas under clause (i) of sub-section (1) of section 174 of the Haryana Goods and Services Tax Act, 2017 (19 of 2017) the provisions of the Haryana Value Added Tax Act, 2003 (6 of 2003) except in respect of goods included in the Entry 54 of the State List of the Seventh Schedule to the Constitution of India stood repealed subject to the actions as saved under sub-section (2) of section 174;

And whereas clause (i) of sub-rule (7) of rule 25 of the Haryana Value Added Tax Rules, 2003 provides that-

“Where an agreement is executed by the developer with the intended purchaser after commencement but before completion of construction, the taxable turnover of sale shall be the total value of agreement, as reduced by cost of land and pro-rata amount of labour, services and like charges, determined in accordance with this rule.”;

And Whereas admittedly, clause (i) of sub-rule (7) of rule 25 of the Haryana Value Added Tax Rules, 2003 is not in conformity with the law laid down by the Hon’ble Supreme Court of India in the case of M/s Larson and Tubro Limited Vs. State of Karnataka and others decided on the 26th September, 2013 so far as the value of taxable turnover cannot include the value of goods incorporated in the works contract before the agreement executed with the intended buyer;

Now, therefore, in exercise of the powers conferred by the third proviso to sub- section (2) of section 174 of the Haryana Goods and Services Tax Act, 2017 (19 of 2017), the Governor of Haryana hereby makes the following Order, namely:-

HGST Clarification on Calculation of AATO for Annual GST Return filing

1. This Order may be called the Haryana Goods and Services Tax (Removal of Difficulties) Order, 2021.

2. For the removal of difficulties, it is hereby clarified that as per the clause (i) of sub-rule (7) of rule 25 of the Haryana Value Added Tax Rules, 2003, for determining the taxable turnover of sale, the cost of material and other labour/services and like charges incurred in the execution of works contract before entering into the agreement with the intended purchaser, shall also be reduced besides the already provided deductions from the total value of agreement.

3. This Order shall come into force with effect from the 17th May, 2010.

Anurag Rastogi,
Additional Chief Secretary to Government, Haryana,
Excise and Taxation Department.

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