Goods And Service Tax India

In Crane Betel Nut Powder Works vs Commissioner of Customs & Central Excise, Tirupathi & Another the excise assessing officer took the view that crushing of betel nuts into smaller pieces and adding essential/non-essential oils, menthol, sweetening agent etc resulted in a separate product, namely betel nut powder.

However, the Supreme Court decided that no new product is created in the process and said that “In our view, the Commissioner of Customs and Central Excise (Appeals) has correctly analysed the factual as well as the legal situation in arriving at the conclusion that the process of cutting betel nuts into small pieces and addition of essential / non-essential oils, menthol, sweetening agent etc. did not result in a new and distinct product having a different character and use.”

In Federal Bank & ors vs State of Kerala & ors, the Supreme Court decided that banks selling gold that was pledged to them were covered by the definition of “dealer” under the Kerala General Sales Tax Act, 1963 after the amendment by the Kerala Finance Act, 1998.

Date of decision : 21 March 2007

In Sree Durga Distributors vs State of Karnata, the Supreme Court decided that pet food for cats and dogs will not fall under Entry 5 of the First Schedule to the Karnataka Value Added Tax Act, 2003.

The entry reads as under :

“5. Animal feed and feed supplements, namely, processed commodity sold as poultry feed, cattle feed, pig feed, fish feed, fish meal, prawn feed, shrimp feed and feed supplements and mineral mixture concentrates, intended
for use as feed supplements including de-oiled cake and wheat bran.”

These products will not be eligible for exemption from VAT.

Excerpt from the speech of Sri P Chidambaraam, Union Finince Minister, Government of India while presenting the Union Budget, 2007-2008

“I wish to record my deep appreciation of the spirit of cooperative federalism displayed by State Governments and especially their Finance Ministers. At my request, the Empowered Committee of State Finance Ministers has agreed to work with the Central Government to prepare a roadmap for introducing a national level Goods and Services Tax (GST) with effect from April 1, 2010.”

With this, the initial step in implementing the Goods & Service Tax in India has been taken

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