STATE OF KARNATAKA . vs M/S DURGA PROJECTS INC

The Supreme Court addressed the applicability of tax rates on works contracts under the Karnataka Value Added Tax Act 2003, specifically examining Section 4(1)(c) introduced by an amendment effective from 1 April 2006. The Court upheld the ruling of the Authority for Advance Ruling, stating that prior to the amendment, there was no specific entry for works contracts, and thus tax should be levied based on the sale of goods under the KVAT Act. The Court concluded that the tax rate for civil works contracts is 12.5% as per the amended provisions, affirming the AAR's interpretation and rejecting the Commissioner's revision order as erroneous.