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2018 (12) TMI 419 - HC - VAT and Sales TaxInput tax Credit - credit at the rate at which the assessee paid it on purchases - Whether the Tribunal was right in having allowed the input tax credit to the goods at the rate in which the assessee-respondent purchased it without reference to the rate of tax levied as per the Schedule to the Kerala Value Added Tax Act, 2003? Held that:- Admittedly, there was an amendment made bringing 'paints' as a commodity taxable at 20% under a table appended to Section 6(1)(a) of the Kerala Value Added Tax Act, 2003. Obviously, various assessees dealing in similar products had purchased the same at 20% and had sold it also at 20%. Later, the Commissioner had come out with a circular bearing No.43/2006, wherein specific items of paints taxable at 20% were enumerated. Later, a further circular was issued bearing No.52/2006 wherein 'synthetic enamel paints' were excluded. The general purpose of the amendment and the circulars would indicate that what was sought to be taxed at the higher rate were those items which are more expensive and not commonly used. The input tax credit can be only at the rate at which the commodity is taxed as per the Schedule to the Act. If there is tax payment in excess of the rate available in the Schedule, then necessarily such collection to that extent would be forfeited by the State and the person who has paid the said tax would have to claim refund. However, since the confusion created by the departmental circular for certain items, credit allowed to the extent of confusion so created. Decided in favor of Revenue.
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