The goods before the delivery and after the execution of works contracts are different, Under the State Sales Tax Laws, before the 46th Amendment to the Constitution of India. Earlier the Sales Tax was applicable only on the sales covered under the sale of goods Act, the 46th amendment to the Constitution of India has been made on 2nd February, 1983 to add a sub-article (29-4) as under,
a tax on the transfer of property in goods (whether a goods or in some other form) involved in the execution of a works contract”
After the said 46th Amendment to the Constitution, the States were empowered to levy Sales Tax / Works Contract Tax on such sales, called as “Deemed sales” involved in the execution of works contract. Due to the said amendment, the concept of `Deemed Sale’ was introduced and this deemed sale is subject to state VAT.
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