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2015 (8) TMI 792 - KARNATAKA HIGH COURTNet tax payable – Rebate on Input tax out of job work receipts to the assessee – Tribunal held that Authority erred in forming opinion that restrictions provided in Section 11 of Karnataka Value Added Tax Act, 2003 were applicable and assesse was not entitled for claim of input tax deduction in full as assesse has used major portion of raw-materials and consumables in processing of other goods – Whether tax payable on consumables can be taken into consideration in arriving at net tax payable – Held that:- Benefit of input tax rebate was available when goods which has suffered input tax were used in course of business of dealer – By virtue of Section 10(2), if dealer had paid input tax on consumables which were used in course of his business, though he was not liable to pay any output tax, still in taxable turnover of said business, he was entitled to claim deduction of this input tax, however, subject to restriction specified in Sections 11, 12, 13, 14, 17 and 18 – When consumables were used in job work in respect of which no output tax was payable by assesse or used in manufacturing activity and when said manufactured goods were sold there was liability to pay output tax by assesse – Assesse was entitled to benefit of input tax rebate on total taxable turnover of his business – Tribunal rightly extended benefit of tax rebate. If goods which suffered input tax was despatched outside State or used as input in manufacturing, processing or packing of other taxable goods despatched to place outside State, then, input tax shall not be deducted in calculating net tax – Benefit of deduction of input tax was available only when assesse has paid output tax within State – Therefore, finding of Tribunal that assesse was entitled to benefit of deduction of input tax irrespective of goods being sold within State or outside State was not correct – Decided partially against revenue.
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