Goods And Service Tax India

The Assam High Court, while delivering the judgement in ITC Ltd vs State of Assam & Others, held that the Assam Entry Tax (Amendment) Ordinance, 2005 is unconstitutional and invalid. The notifications dated 8th Jan 2002, 21st Aug 2003, 26th Aug 2006, 29th Sep 2004 and 28th Feb 2005 were also held to be ultra vires, unconstitutional, null and viod. [Date of decision: 17th November 2006]

It is to be noted that the Assam Entry Tax Act, 2001 is still valid. However, addition of new goods to the Schedule to the Act for imposing entry tax was held to be beyond the competence of the state legislature as the prior sanction of the resident was not obtained.

Multi Function Printers were under HSN Code 8471.60.27 till 31 Dec 2006 and were allotted HSN Code 8443.31 from 1 Jan 2007. Printers are now under HSN Code 8443.32.

The Kerala Finance Act, 2007 had modified the schedule entry relating to IT Products and printers are now a distinct entry under Sl No 69(22)(c) of the Third Schedule to the Kerala Value Added Tax Act, 2003 wef 1st April 2007.

Therefore it was assumed that MFPs under HSN Code 8443.31 would now suffer tax at 12.50%.

The Rajasthan High Court [Jodhpur Bench], while delivering the judgement in Dinesh Pouches Ltd vs State of Rajasthan & Others, held that the Rajasthan Tax on Entry of Goods into Local Areas Act, 1999 is unconstitutional and invalid.

The High Court held that the Act was not compensatory as no special services were provided to those from whom the tax was collected. The Act was held to impede interstate trade and commerce. The prior assent of the President was not obtained as required by Article 304(b) of the Constitution.

Date of decision: 21st August 2007

The Madhya Pradesh VAT Act was amended by Amendment Act, 2007 and the amendments came into effect from 1st April 2007. In Sec 7, a new clause to sub-section (1) has been inserted and the amended provisions are:

The Karnataka High Court, while delivering the judgement in Bharat Earth Movers Ltd vs State of Karnataka & Others [2007] 8 VST 69 (Karn), held that Karnataka Special Tax on Entry of Certain Goods Act, 2004 is unconstitutional and invalid.

The High Court held that the Act was not compensatory as no special services were provided to those from whom the tax was collected. The Act was held to impede interstate trade and commerce. The prior assent of the President was not obtained as required by Article 304(b) of the Constitution.