Goods And Service Tax India

This was the question before the West Bengal Taxation Tribunal in Dabur India Ltd vs Asst Commissioner of Commercial Taxes, Corporate Division.

The WBTT rejected the contention of the petitioner that this is an ayurvedic medicine. While the WBTT accepted the fact that this product is produced using ingredients specified in ayurveda texts, it rejected the claim that these be assessed as drugs and medicines. the WBTT accepted the arguments of the Department that in common parlance this is considered to be confectionery.

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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The Kerala Finance Act, 2007 has finally been enacted with a number of changes from the proposals in the Kerala Finance Bill, 2007.

The Third Schedule has been amended to replace the list of IT Products taxed @ 4%. A major change is the new HSN Code of printers. Earlier Printers were under HSN Code 8471 and multi-function devices comprising copier, printer, scanner and fax were also classified under this Code and were taxed @ 4%. The Kerala Government had maintained that this was not correct as photocopiers were taxed @ 12.50%. However, as these devices were classified under HSN Code 8471, they were liable to be taxed @ 4% and not 12.50%.