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2019 (9) TMI 1082 - HC - VAT and Sales TaxLiability of VAT - taxable event - Recovery of facility charge - facility charge was for the provision, operation and maintenance of the plant, pipelines and the meter. - It is a specific case of the petitioner is that it has discharged its liability of payment of value added tax (VAT) on the consideration received for supply of gases and no VAT amount was leviable and/or charged from the petitioner prior to the present assessment years in dispute on the amount of facility charge recovered by it from Tata Steel Ltd. for providing facilities. HELD THAT:- We are not in agreement with the contention of the petitioner-counsel that the facility charge and the gas price are distinct and separate from each other as the contractual provision itself clarify that there is inter-dependency of the gas prices with the facility charges and both are linked to each other. In the instant case, the facility charge is a consideration passing from the purchaser (Tata Steel Limited) to the dealer (Linde India Limited) in relation to the sale of gases. According to the agreement, the freight charges are being taken for the provision, operation and maintenance of the plant, the pipelines and the meters. All the three constituents are important for selling gases by the petitioner to Tata Steel Limited and in their absence sale may not be complete. The plant is important for producing the saleable goods, the pipeline is important for transporting the saleable goods and the meter is important for calculating the total quantity of goods sold - Accordingly, facility charges are directly relatable to sale of goods by the petitioner to Tata Steel Limited and is a consideration passing from Tata Steel Limited to the petition for sale of goods. Thus is ample clear that taxable event in case of ‘Central Excise’ and ‘Sales Tax’ is different. While ‘manufacture’ is the event in case of Central Excise; the taxable event in the case of VAT is ‘sale’. The “Facility Charge” levied by the petitioner company is towards consideration of sale of gases and is exigible to value added tax - application dismissed.
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