Karnataka Value Added Tax Act, 2003

M/s. M.K. Agro Tech Pvt. Ltd. (the assessee) purchased sunflower oil cake, paid input VAT, extracted oil (taxable) and sold the de‑oiled cake (exempt under Section 5). The State of Karnataka argued that only a partial rebate of input tax was permissible under Section 17 of the Karnataka Value Added Tax Act read with Ru…

M/S Southern Motors, a registered dealer under the Karnataka Value Added Tax Act, 2003, issued tax invoices for vehicle sales and later granted post‑sale discounts through credit notes, retaining only the net amount. The Assessing Authority disallowed deduction of these discounts from total turnover, insisting that a d…

The Supreme Court examined whether a credit note issued by an automobile manufacturer to a dealer, for replacing a defective part under a warranty, constitutes a sale liable to sales tax. It held that when the dealer uses a part from his own stock or purchases it from the market and is reimbursed by a credit note, the …

The State of Karnataka appealed against the High Court’s order allowing Input Tax Credit (ITC) claimed by several purchasing dealers, including M/s Ecom Gill Coffee Trading Private Limited. The Assessing Officer had denied ITC on the ground that the transactions were not genuine and the sellers were either deregistered…

The Supreme Court examined whether iron and steel reinforcement used in building works contracts retains its identity as "declared goods" under the Central Sales Tax Act, 1956, and consequently whether it is taxable at the restricted 4% rate prescribed in Section 15. The Court held that the 46th Constitution Amendment …

Modi Naturals Ltd., a registered dealer of rice bran oil in Uttar Pradesh, claimed full input tax credit (ITC) on tax paid for raw rice bran used to manufacture taxable oil and a by‑product (de‑oiled rice bran, an exempt good). The Revenue argued that under Section 13(1)(f) of the UP VAT Act the ITC should be limited t…

M/s Durga Projects Inc, a civil works contractor registered under the Karnataka Value Added Tax (KVAT) Act, 2003 and the Central Sales Tax Act, sought clarification from the Authority for Advance Clarification and Ruling on the tax rate applicable to works contracts before 1 April 2006. The AAR held that the rate shoul…

Maya Appliances (now Preethi Kitchen Appliances) manufactures home appliances and offers quantity discounts to its distributors based on their quarterly performance. The discounts are applied to the net sale price and VAT is collected on that net amount. The assessing authority disallowed the discounts as deductions fr…

M/s Hotel Ashoka, a dealer under the Karnataka Value Added Tax Act, 2003 and the Central Sales Tax Act, 1956, sold goods at its duty‑free shop in Bengaluru International Airport before the goods crossed the customs frontiers of India. The Assistant Commissioner of Commercial Taxes assessed Rs. 4,20,70,900 as sales tax,…