Home Case Index All Cases VAT and Sales Tax VAT and Sales Tax + HC VAT and Sales Tax - 2009 (11) TMI HC This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2009 (11) TMI 874 - KARNATAKA HIGH COURTWhether the activity of works contract up to March 31, 2006 is exigible to the KVAT Act, 2003? Held that:- Once the work is assigned by the contractor to its subcontractor, the contractor ceases to execute the work because the property passes by accretion and there is no property in goods left with the contractor which is capable of retransfer either as goods or in any other form. Thus, the transfer of property is from sub-contractor to the contracting party that is contractee, namely, the recipient. Hence the work executed by the subcontractor results in single transaction and not as multiple transaction. Hence, it would be erroneous to hold that the payments made by the contractor to the sub-contractor would require to be brought within the total turnover of the appellant or contractor and if such an interpretation is to be given it would lead to double taxation and hence the consideration for execution of works contract executed refers to consideration received by the principal contractor and does not include the consideration received and paid to sub-contractor. Under section 15 of the KVAT Act, 2003 for the period up to March 1, 2006 the principal contractor is entitled for deduction of payment made by subcontractors only if they are registered dealers and the said sub-contractor has accounted for it and paid tax thereon. In favour of the assessee
|