(1) (i) In making an assessment under section 24, the assessing authority shall take into account such of the following factors as may be relevant to the determination of the prevailing market price of the goods, namely:-
(a) the price charged by any dealers other than the dealer's case under scrutiny at the relevant stage of sale of similar goods during the relevant period;
(b) the difference between the price charged by any dealer other than the dealer's case under scrutiny towards the purchase of the goods from the earlier seller and the price charged on the resale of the same goods;
(c) the difference between the price paid by the dealer concerned whose case is taken up for assessment under the said section towards the purchase of the goods from the earlier seller and price charged for the resale of the same goods; and
(d) the differential price charged on sales against bulk orders and small orders in respect of the same goods.
(ii) If the difference in prices, exclusive of the tax element, is more than fifteen per cent (15%), the assessing authority shall examine the reasons for the variation, taking into account the relationship between the parties to the transactions, the charges for after sales services, packaging, transport and other expenses incurred by subsequent sellers which add to the cost of the goods at each stage of sale by successive dealers. The assessing authority shall also examine whether there is such difference in the price charged on the sales of the same goods to different customers in unlimited quantities and at the same prices. After making due allowance towards the variation in prices and normal profit margin, the assessing authority shall arrive at the market price that should have been charged by the dealer and levy tax on the taxable turnover so arrived at.
(2) (a) If a dealer receives or returns in any year any amount due to price variation as provided under section 27 of the Act, he shall within thirty days from the end of the year submit a return in Form - N to the assessing authority.
(b) On receipt of the return in Form - N, the assessing authority shall pass order
(i) demanding the tax payable on the amount received due to price variation and shall serve upon the dealer a notice in Form - O; or
(ii) refunding the tax due on the amount returned and shall serve upon the dealer a notice in Form - P.
(3) The taxable turnover of the dealer liable to pay tax under section 15 on transfer of property in goods involved in the execution of works contract shall be arrived at after deducting the following amounts from the total turnover of that dealer, namely:-
(a) all amount involved in respect of goods involved in the execution of works contract in the course of export of the goods out of the territory of India or in the course of import of the goods into the territory of India or in the course of inter-State trade or commerce;
(b) all amounts relating to the sale of any goods involved in the execution of works contract which are specifically exempted from tax under the Act;
(c) all amounts paid to the sub-contractors as consideration for execution of works contract whether wholly or partly:
Provided that no such deduction shall be allowed unless the dealer claiming deduction, produces proof that the sub-contractor is a registered dealer liable to pay tax under this Act and that the turnover of such amount is included in the return filed by such sub-contractor;
(d) subject to sub-rule (5) of this rule, the following amounts are allowed as deductions from the total consideration received or receivable for arriving the value of the goods at the time of incorporation under section 15(1) of the Act:-
(i) labour charges for execution of the works;
(ii) charges for planning, designing and architect's fees;
(iii) charges for obtaining on hire or otherwise machinery and tools used for the execution of the works contract ;
(iv) cost of consumables such as water, electricity, fuel, etc., used in the execution of the works contract, the property in which is not transferred in the course of execution of a works contract;
(v) cost of establishment of the contractor to the extent it is relatable to supply of labour and services;
(vi) other similar expenses relatable to supply of labour and services; and
(vii) profit earned by the contractor to the extent it is relatable to supply of labour and services;
(e) all amount towards labour charges and other charges not involving any transfer of property in goods, actually incurred in connection with the execution of works contract, or such amounts calculated at the rate specified in column (3) of the Table below, if they are not ascertainable from the books of accounts maintained and produced by a dealer before the assessing authority for determining the tax liability under section 15(1) of the Act.
TABLE
(f) all amounts, including the tax collected from the contractee, refunded to the contractee or adjusted towards any amount payable by the contractee, in respect of unexecuted portion of works contract based on the corrections on account of measurements or check measurements, subject to the conditions that -
(i) the turnover was included in the return and tax paid; and
(ii) the amount including the tax collected from the customer is refunded or adjusted, within a period of six months from the due date for filing of the return in which the said amount was included and tax paid.
(4) After assessment under section 24 of the Act, the assessing authority shall serve on the dealer a demand notice in Form - O, after adjusting the eligible input tax credit. If the tax due on assessment is lower than the tax already paid, the assessing authority shall serve upon the dealer a notice in Form -P, informing the dealer of the adjustment of excess tax towards the arrears or the refund of the amount.
(5) The value of the goods used in execution of work in the contract, declared by the contractor shall not be less than the purchase value and shall include seigniorage charges, blasting and breaking charges, crusher charges, loading, transport and unloading charges, stacking and distribution charges, expenditure incurred in relation to hot mix plant and transport of hot mix to the site and distribution charges for the purpose of determining the tax liability under section 15(1) of the Act.
(6) Where tax has been deducted at source, the contractor shall submit Form -T after certification by the contractee. In case the contractor is unable to submit the Form -T, he shall pay the tax due.