- Maharashtra Sales Tax Tribunal upholds rejection of set-off claimed under Rule 54(g) of MVAT Rules towards purchase of plant & machinery during execution of works contract in respect of windmills for electricity generation;
- On perusal of tax invoices raised by contractor, viz. Suzlon Infrastructure Ltd during the period April 1, 2005 to March 31, 2006, Tribunal holds that such purchases resulted into immovable property i.e. the plant & machinery were permanently embedded in the earth / attached to things embedded in earth;
- Also notes that VAT was charged at 8% i.e. rate applicable to works contracts albeit vide 2 separate invoices; Further notes coordinate bench ruling in Priyadarshini Polypacks which held that amendment to Rule 54(g) inserting the words “other than plant and machinery” was not retrospective w.e.f. April 1, 2005 but only prospective from September 8, 2006;
- Consequently, ruling out application of Rule 53(7B) relating to reduction of set-off, Tribunal observes that till September 8, 2006, even if purchases effected by assessees were presumed to be not plant & machinery, they would not be entitled to any set-off : Maharashtra Tribunal : Mumbai Tribunal