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2011 (9) TMI 11 - SC - VAT and Sales TaxWhether margarine can be treated as edible oil and thus, fall under Entry 17A of the Second Schedule of the said Act - Taxable at 4% or 8% - Circular no.2439/96/TD dated 19.2.96 - Held that: - normally anything which is used for preparation of a food article is edible because ultimately it is being consumed by human beings. Though one may not consume margarine directly or may not use for normal cooking, the fact is that margarine is used for preparing bakery items which are consumed by human beings and, therefore, margarine is also edible. Having around 80% fat, and being in the nature of oil, in our opinion, it should be considered as edible oil. Circular dated 19th February, 1996, explaining the term "edible oil" - intention of the government was to give relief in tax to edible oils. So as to clarify the doubt, it has been specifically stated in the said circular that edible oils would also include hydrogenated oils such as ground nut oil, gingely oil, refined oil and vanaspathi oil. The aforestated circular clarified that hydrogenated edible oil like vanaspathi oil should be treated as edible oil. - The Tribunal was right when it came to the conclusion that margarine should be taxed @ 4% as it is edible oil. - Order of HC quashed. - Decided in favor of assessee
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