STATE OF ANDHRA PRADESH versus M/S. KONE ELEVATORS (INDIA) LTD.

The contracts for supply and installation of lifts by the assessee are contracts for sale. The major component of the end-product is material, skill and labour are incidentally used, and delivery of lifts to customer constitutes sale. Section 5G does not apply, and deductions for labour charges are disallowed.

Parties: Appellant: State of Andhra Pradesh; Respondent: Kone Elevators (India) Ltd.
Jurisdiction: India
Judgment Date: 17 February 2005
Procedural Posture: Civil Appeal / Final Judgment on Appeal From Andhra Pradesh High Court Decision in T.r.c. No. 129 of 1999
Outcome: Appeal allowed
Legal Topics: Classification of Contracts as Sale or Works Contract, Levy of Sales Tax, Deduction of Labour Charges, Section 5 F and 5 G of Andhra Pradesh General Sales Tax Act

Taxation Sales Tax Classification of Contracts as Sale or Works Contract Levy of Sales Tax Deduction of Labour Charges Section 5 F and 5 G of Andhra Pradesh General Sales Tax Act

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Parties

State of Andhra Pradesh

Appellant

Kone Elevators (India) Ltd.

Respondent

Procedural Posture

Civil Appeal / Final Judgment on Appeal From Andhra Pradesh High Court Decision in T.r.c. No. 129 of 1999

Legal Issues

1 Whether contracts for sale and installation of lifts are contracts for sale or works contract
2 Whether assessee is entitled to deduction of labour charges under Section 5G

Ratio Decidendi

Court Disposition

Appeal allowed

Orders

Judgment and order of Andhra Pradesh High Court in T.R.C. No. 129 of 1999 set aside
Judgment and order of Sales Tax Appellate Tribunal in T.A. Nos. 676 & 677 of 1995 set aside