#VAT

CESTAT Chennai rules that service tax cannot be levied on the portion of a works contract already subjected to VAT under TNVAT Rules, preventing double taxation. The judgment clarifies Rule 2A(ii)(B) applicability where material costs are indeterminate, impacting contractors and tax authorities alike.

The Tribunal holds that payment of VAT on hire of machinery constitutes deemed sale under Article 366(29A)(d), excluding such transactions from service tax under STGU category.