2015-VIL-453-KAR
M/s HICURE PHARMACEUTICALS PVT LTD Vs THE DEPUTY COMMISSIONER OF COMMERCIAL TAXES (AUDIT – 3)
Karnataka Value Added Tax Act – Work Contract – contracts for manufacture and supply of medicinal pharmaceuticals injections – Whether Water for Injection (WFI) / Demineralized water used as an input in the execution of the works contract attracts levy of tax under the KVAT Act/CST Act and whether the contract executed by the assessee with its principals or customers is a contract for service or a composite divisible contract – transfer of property in goods involved in works contract – Divisible work contract
- HELD – contract executed by the assessee to supply WFI/DM water which is an input for the manufacture of injection, supplied by the assessee is a composite works contract involving transfer of property in goods as well as labour and service.
- The State is empowered to bifurcate the contract and levy sales tax on the value of the goods involved in the execution of the works contract. The authorities and the Tribunal having considered the scope of 46th Constitutional amendment and the principles of law enunciated by the Apex Court have rightly subjected the deemed sale of WFI/DM water to tax on the value of such goods transferred in the execution of works contract, which cannot be found fault with
- Assessee revision petitions are dismissed