Home Case Index All Cases VAT and Sales Tax VAT and Sales Tax + HC VAT and Sales Tax - 2016 (10) TMI HC This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2016 (10) TMI 815 - HC - VAT and Sales TaxWhether tax credit paid on purchases of Oxygen Gas and LPG used in cutting hull of the ship during ship breaking/scrapping process is admissible - The main thrust of the contention of the opponent was that the activity of ship breaking is a manufacturing activity and in that process since the Oxygen gas and LPG gas are being consumed, is entitled to have a tax credit - Held that: - the sales tax department since about 20 years by now has continued to assess the opponent as a manufacturer, there was no justifiable reason for determining authority to treat the activity not as a manufacturing activity - In case of Ship Scrap Traders 2001 (5) TMI 43 - BOMBAY High Court held that ship breaking activity gives rise to manufacture and production of altogether new commercial article or thing which is commercially indentifiable in the commercial world as other than ship and therefore, in that case, the assessee was entitled to claim deduction under Sections 80 HHA and 80-I of the Income Tax Act - opponent is engaged in ship breaking activity, which is nothing but a manufacturing process under the provisions of the VAT Act and the petroleum gases (LPG) and Oxygen gases are forming part of the said process, being raw material covered within the swip of Section 2(19) of the VAT Act, and since the same are the processing material and consumable stores in the activity, the tax credit of tax paid on purchases of these commodities is admissible under the Act - Decided in favor of the assessee.
|