https://www.taxtmi.com/caselaws?id=469961 In a works contract where the assessee bifurcated the transaction under the Karnataka VAT regime and paid VAT on the goods portion, only the service component was liable to service tax. The Tribunal applied the valuation formula under Rule 3(2)(m) of the Karnataka Value Added Tax Rules, 2005 and relied on the principle that VAT payment on transfer of property in goods treats that part as a sale, with Board clarification supporting exclusion of the goods portion from service tax. On that basis, the service tax demand and consequential penalty were held unsustainable and were set aside. en-us Thu, 14 Aug 2025 00:00:00 +0530 Fri, 10 Jul 2026 22:36:09 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=469961 In a works contract where the assessee bifurcated the transaction under the Karnataka VAT regime and paid VAT on the goods portion, only the service component was liable to service tax. The Tribunal applied the valuation formula under Rule 3(2)(m) of the Karnataka Value Added Tax Rules, 2005 and relied on the principle that VAT payment on transfer of property in goods treats that part as a sale, with Board clarification supporting exclusion of the goods portion from service tax. On that basis, the service tax demand and consequential penalty were held unsustainable and were set aside. Case-Laws Service Tax Thu, 14 Aug 2025 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=469961