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2018 (7) TMI 1109 - HC - VAT and Sales TaxLevy of VAT - supply of Rice - whether the price fixed for levy rice, includes the element of tax on paddy and rice? - Held that:- Besides the cost of paddy, the components which have been taken care of while calculating the price of rice, included the element of tax on rice. The basic price of rice after adding all costs including the profit of the miller was calculated at ₹ 935.36 for common variety of rice and component of 4% VAT was added thereon to the tune of ₹ 37.41. After adding the cost of gunny bags and tax thereon, final procurement price was determined. Hence, the argument that merely because in the price of levy rice fixed by the Central Government the word, 'inclusive of all taxes' has been mentioned, the same will not mean that the tax is included therein, is totally misconceived. While making the payment of the amount of rice supplied by the petitioner to the Corporation, out of the bills so raised, while calculating the value as per the price fixed by the Government of India, the Corporation had deducted the element of tax on rice finding that the petitioner is an exempted unit, which is not liable to pay tax to the State. The fact cannot be denied that in case the petitioner being an exempted unit collects tax on sale, he shall not be entitled to retain the same as on the principle of unjust enrichment, the same may have to be deposited with the State. The price of levy rice fixed by the Government of India, at which the petitioner had supplied rice to the Corporation, includes the component of tax on rice, he will not be entitled to claim the same from the Corporation being a unit exempted from payment of sales tax - Petition dismissed - decided against petitioner.
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