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2010 (8) TMI 859 - HC - VAT and Sales Tax
Issues:
Rate of tax on gold coins and medallions sold by the appellant during 2005-06 and 2006-07. Analysis: The judgment of the court, delivered by Justice C.N. Ramachandran Nair, addressed the question of the rate of tax applicable to various gold coins and medallions sold by the appellant. The appellant argued that the items should be classified as "bullion" under item 1 of the Second Schedule to the Kerala Value Added Tax Act, 2003. However, the Government Pleader cited a previous judgment where similar articles were classified as semi-finished gold articles falling under entry 4(4) of the Third Schedule to the KVAT Act. The court noted that the items in question, such as those embossed with pictures of deities and company logos, were not used as raw materials for making ornaments but were worn as accessories. Therefore, the court concluded that the items fell under entry 4(4) of the Third Schedule for tax levy, rather than the residuary entry as assessed by the Tribunal at 12.5 percent. In line with a previous judgment, the court allowed the revisions in part by directing the assessment of the entire turnover of the items at a reduced rate of four percent, as opposed to the 12.5 percent assessed by the Department and confirmed by the Tribunal. This decision clarified the classification of the gold coins and medallions, providing guidance on the appropriate tax rate applicable to such items based on their intended use and characteristics.
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