Petitioner entered into an agreement with Tamil Nadu Water Supply and Drainage Board for laying under Ground Sewerage. The contract price was inclusive of TNVAT and Excise Duty components.
It was mentioned in the contract that deduction at source towards sales tax shall be made at 2% for civil works contract and at 5% for all other works contract. Under the GST Regime the distinction between civil works and other works became irrelevant since all the works contract for construction activities came to be taxed at 12%. Due to change in tax regime it became necessary to re-work the terms of the contract.
Source BT Associates
