In Brief
The State of Karnataka appealed a High Court judgment favouring a civil works contractor regarding the applicable tax rate on materials used in works contracts before 1 April 2006. The issue was whether the contractor should pay tax at the individual rates applicable to each good (as per Schedules) or at a uniform rate. The Supreme Court held that prior to 1 April 2006, no uniform rate applied; goods were taxable at their respective rates under the Schedules. Section 4(1)(b) was merely a residual provision for other goods not specifically covered. The uniform rate for works contracts was introduced only on 1 April 2006. The appeal was dismissed, upholding the High Court decision.",
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