Home Case Index All Cases VAT and Sales Tax VAT and Sales Tax + HC VAT and Sales Tax - 2022 (8) TMI HC This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2022 (8) TMI 279 - HC - VAT and Sales TaxValuation - includability or otherwise of the value of the free-of- cost components in the cost price of the product in the context of levy of Value Added Tax (VAT) - Whether the Department was right in equating sales tax to excise duty? - HELD THAT:- Admittedly, learned counsel for the petitioner had not supplied the methodology of pricing except to furnish an illustration. Such illustration is inconclusive and inadequate for the purposes of arriving at the proper turnover and to substantiate its case that the pricing is based only upon the cost of the materials procured by the petitioner. Normally, the cost price of a product would take into account the purchase cost of inputs, direct and indirect costs of manufacture and the profit margin. Unless the petitioner supplies the break-up of the sale consideration, the officer would not be in a position to determine the pricing methodology and it is for the petitioner to satisfy the officer that the ultimate price fixed by it does not take into account the value of the free-of-cost components. While it is entitled to exclude the value of the components supplied free by Daimler, the facts in relation to pricing have to be placed before the officer to establish that the product has not been undervalued when compared with the market price of similar products. The impugned orders of assessment are set aside - Petition disposed off.
|