Home Case Index All Cases VAT and Sales Tax VAT and Sales Tax + HC VAT and Sales Tax - 2017 (9) TMI HC This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2017 (9) TMI 680 - HC - VAT and Sales TaxValuation - subsidy - includibility - whether the subsidy received by the companies would form part of the turnover for the purpose of levy of tax under the Kerala Value Added Tax Act? - Held that: - Subsidy is given to the manufacturer/dealer to make up the difference between the Retention Price and the price fixed by the Government under the Fertiliser Control Order. Though subsidy paid is for the benefit of the consumer public to ensure that the prices are kept at a reasonable level and at the same time, a reasonable return on investment is also ensured to the manufacturers/dealers, the subsidy is not a consideration for the sales effected. It is also not a reimbursement of the difference in the purchase price and sale price, but what is paid as subsidy is the difference between the maximum price specified in the Fertiliser Control Order and the Retention Price Scheme. The dealer sells the products namely, fertiliser, liquefied Petroleum Gas or PDS Kerosene as the case may be, at prices fixed by the Government of India and what is reimbursed by the Government of India is not part of the price or the difference between the purchase price or sale price. Only if what is reimbursed is the balance of the price, then and then alone, Explanation VII would be of relevance. Therefore, even in spite of the incorporation of Explanation VII to Section 2(Iii) of the KVAT Act, the legal position that subsidy received by dealers like the respondents herein cannot form part of their turn over remains unaltered. Appeal dismissed - decided against Revenue.
|