https://www.taxtmi.com/caselaws?id=326496 The revisional order disallowing deduction for amounts paid to sub-contractors under the Karnataka Value Added Tax Rules was set aside because the authority had not properly applied the governing principle on works contracts. In works contracts, property in goods passes on incorporation, and the same execution cannot be treated as giving rise to multiple deemed sales merely because the contractee and sub-contractor lack privity. The deduction rule is meant to ensure sub-contractor receipts are brought to tax in the correct turnover, not to override the substantive law on works contracts. The matter was remanded for fresh consideration in accordance with law, with the constitutional challenge left open. en-us Thu, 24 Mar 2016 00:00:00 +0530 Thu, 14 Apr 2016 18:40:00 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=326496 The revisional order disallowing deduction for amounts paid to sub-contractors under the Karnataka Value Added Tax Rules was set aside because the authority had not properly applied the governing principle on works contracts. In works contracts, property in goods passes on incorporation, and the same execution cannot be treated as giving rise to multiple deemed sales merely because the contractee and sub-contractor lack privity. The deduction rule is meant to ensure sub-contractor receipts are brought to tax in the correct turnover, not to override the substantive law on works contracts. The matter was remanded for fresh consideration in accordance with law, with the constitutional challenge left open. Case-Laws VAT and Sales Tax Thu, 24 Mar 2016 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=326496