Kerala Sales Taxes

Sub:- KGST Act- Addl.Sales Tax under Section 5D of the Act- Whether applicable to tax reduced as per notification under section 10 of the Act- clarification under section 59A- reg:-

Ref:- Application dt. 24.08.01 from National Thermal Power Corporation, Kayamkulam.
Order of the High Court of Kerala in OP No.37066/01/(K) Dt.07.12.01

ORDER No.C3.48095/01/CT Dt. 05.09.02

The National Thermal Power Corporation limited, Kayamkulam has sought clarification whether the additional tax levied under Section 5D of the KGST Act, newly inserted in the Kerala Finance Bill 2001 is applicable to the tax which is reduced as per notification issued under section 10 of the KGST Act.

After hearing Sri.Alex Kuriakose, Chartered Accountant of the petitioner and after considering the matter in detail clarification was originally issued by the Commissioner, Commercial Taxes vide order No. C3.48095/01/CT dt. 27.10.01.

The Hon'ble High Court vide judgement in OP No. 37066/01 dated. 07.12.01 was pleased to set aside the said clarification order and to remit the matter back for consideration afresh taking into consideration the impact of the decision of the Hon'ble High Court in the decision in Ramalingam Nadar and Sons Vs. State of Kerala reported in 1993 (1) KLT 822 and pass orders afresh as the legal position held in that case was not seen referred to and considered in the order.

Copy of the decision of the Hon'ble High Court in OP 37066/01 and aforesaid is also produced by Sri. Alex Kuriakose, the authorised representative of the petitioner.

In compliance with the direction of the Hon'ble High Court, notice was issued to the authorised representative of the petitioner Sri.Alex Kuriakose and his arguments were heard.

It is contented by the authorised representative of the petitioner that the reduction granted vide SRO 1091/99 in the rate of tax payable is in the rate of tax payable under the KGST Act and not only in the tax payable under section 5 alone; that after insertion of section 5D in the KGST Act by the Kerala Finance Bill 2001, the normal rate of tax payable under section 5 of the KGST Act is increased by an Additional sales tax at 15 % on the tax payable under section 5 of the Act, that the reduction granted has therefore to be deemed to be on the tax payable under the KGST Act which takes in additional sales tax also and that clarification sought for may be issued accordingly. It is his further contention that the decision in Ramalingam Nadar's case (1993) (1 KLT 822) supports his contention.

Ramalingam Nadar's case in relation to the validity of deprivation of statutory and other benefits of reduction in rate of tax retrospectively w.e.f. 01..07..87 by a notification issued as SRO. 781/89 dt. 18..05...89. The position can be narrated as follows:-

There were the following three notifications issued by the State Government granting benefit of reduction in rate of tax to oil millers as on 01..07..87.

SRO. 137/69 dated 01.04.69. Rate of tax on sale of coconut and copra used for production of coconut oil is reduced to 2 %.

SRO. 854/74 dt. 21..11.74. Rate of tax on sale of coconut oil and oil cake to a dealer for interstate sale is reduced to 1 %.

SRO 388/79 dt. 01..04..79. Rate of tax on coconut oil and oil cake to soap manufacturers is reduced to 1 %.

While the above three notifications were in force, the first schedule to the KGST Act which was recast w.e.f 01..07..87 by which coconut oil and oil cake which were respectively under Entries 60 and 29 were brought under entries 50 and 51 with the rate of tax and point of levy remaining the same but with an explanation added there to that where tax had been levied in respect of copra or coconut, the tax leviable on the coconut oil and oil cake produced out of such coconut or copra shall be reduced by the amount of tax levied on such coconut or copra.

The effect of the notifications above mentioned in conjunction with the explanation to Entries 50 and 51 of the first schedule after 01..07...87 was virtually to exempt the sales of coconut oil and oil cake by an oil miller in the circumstance mentioned above, from payment of any tax in as much as they got a reduction, from the tax payable on such sales of the amount of tax which they had paid on the purchases of coconut and copra at 2 % of the purchase value.

It was while matters stood as above that the Government issued Notification SRO. 781/89 dt. 18.05.89 consolidating all the above three Notifications and superceding the three earlier Notifications but granting similar reductions. All the same the benefit was made to subject to the condition that the Explanation to the Entries "coconut oil" and "coconut oil cake" in the first schedule to the KGST Act shall not apply to such sales. The Notification though issued on 18.05.89 was made retrospective w.e.f 01.07.87. The result was that the position which prevailed under the three Notifications by which the rate of tax on those sales stood reduced to 1 % with the added benefit of statutory rebate of the tax paid on the purchase of copra and coconut, ceased retrospectively w.e.f 01..07..87 and the oil millers become liable to pay tax at 1 % on the sales of coconut oil and oil cake, apart from the payment of tax which they had to pay on the purchase of coconut and copra. In other words the statutory benefit granted vide Explanation under Entries 50 and 51 was deprived to those claiming benefit of the three earlier Notifications with retrospective effect viz w.e.f 01..07..87 the date from which the Explanation was incorporated under Entries 50 and 51. Thus the virtual non liability to pay tax which existed from 01..07..87 to 18..05..89 was taken away retrospectively as well by SRO. 781/89 dt. 18.05.89.

The Hon'ble High Court held in Ramalingam Nadar's case that SRO 781/89 dt. 15.08.89 shall have prospective effect only and that the power of the Government under section 10 of the KGST Act cannot be exercised in such a manner as to have the effect of imposing a tax or enhancing the tax payable for a period prior to the issue of the Notification. It was further held that while section 10(1) of the KGST Act enables the Government to grant an exemption or reduction in the rate of tax payable, prospectively or retrospectively a cancellation or variation of such Notification issued under section 10 (3) could have only prospective effect.

In short Ramalingam Nadar's case was one where the Government by a Notification issued under section 10 of the KGST Act, took away with retrospective effect the tax benefit the party was enjoying till then. The said Notification to the extend of its retrospectivity was set aside by the Hon'ble High Court being in excess of exercise of the delegated power under the statute. But the present case is one where the assessee's liability to pay Additional sales tax under section 5D of the KGST Act which section was incorporated w.e.f 23..07..01 viz after issue of SRO 1091/99 is sought to be got rid of the mere reason that the liability to the Additional sales tax is also liability under the KGST Act. The attempt is to have the benefit of the reduction in rate of tax under Notifications that existed even earlier to SRO. 1090/99 and under SRO. 1091/99 stretched as to avoid payment of Additional sales tax as well. This was not an exemption contemplated or intended to be granted to the petitioner under the various Notifications. If at all the Government had such an intention, they would have issued a revised Notification granting that benefit as well as was the practice under similar situations earlier.

It is worthy to bear in mind in this context that the Government have not issued any Notification afresh under section 10(1) or any Notification under section 10(3) of the KGST Act varying SRO. 1091/99, after incorporation of section 5D in the KGST Act by Act 7/2001 so as to grant the added benefit or exemption from payment of Additional sales tax as well. The Government having not done that, the Commissioner Commercial Taxes has no power under section 59A of the KGST Act to grant exemption from payment of Additional sales tax under cover of clarifying the position but has power only to clarify the position as it stands. In the result, it is clarified that Additional sales tax levied under section 5D of the KGST Act is payable on the tax payable by the petitioner at reduced rate as per Notification issued by the Government under section 10 of the KGST Act.

Sd/

Commissioner

/Approved for Issue/

Deputy Commissioner (General)

To.

Sri.Alex Kuriakose

Chartered Accountant

Shalom Buildings, Pattom

Tvpm. 4

PROCEEDINGS OF THE COMMISSIONER OF COMMERCIAL TAXES

THIRUVANANTHAPURAM

Present: V.Somasundaran.I.A.S

Sub:- KGST Act 1963- Rate of tax applicable to various products -IT products in the

context of SRO. 801/01 dt. 16.08.01- Clarification under section 59A issued:-

Read:- Request for clarification put in by M/s. Digicom, Kochi dt. 30..11..01

ORDER No.C3.67358/01/CT Dt. 05.09.02

M/s. Digicom, 5B, RDS- Retreat, Kacheripady, Kochi, 682 018 has sought clarification regarding the rate of tax applicable to various products, IT products in the context of SRO 801/01 dt. 16.08.01.

Sri.P.Santharam Shenoy duly authorised, appeared and was heard, submitted the product catalogues and stated that it is self explanatory and requested to clarify the rate of various IT products in the context of SRO. 801/01 dt. 16.08.01.

The clarification sought for the following items of goods.

.Networking Products such as:

Repcaters & Transceivers

Ethernet/Dual Speed Hubs

Ethernet/Dual speed. /Gigabit switches

Ethernet/Dual speed./ Gigabit/ USB Cards

Print Servers

KVM Switches

Wireless Products

II.Internetworking products such as:

Internal/ External/ USB Modems

PCMCIA LAN/ Modems

Cable Modems

ADSL Modems

Leased Line Modems

ISDN Internal Modem/ Terminal Adapters

ISDN Network Termination

Remote Routers (ISDN, ADSL and Leased line)

Internet Servers

Remote Access

III.Digital Home Products such as:-

Video Conferencing

Digital Camera

MP3 Players

Video Grabber / FM Radio

IV.Cables made of: Copper

Unshielded Twisted pair cables

CAT 6 UTP cables

Patch Cords

Unshielded information outlets

Modular Patch Panel

Keystone Patch panel

Connectors

Shielded Twisted Pair Cables

Shielded Patch Cord

Shield Information Outlets

Shielded Patch Panel

V.Fiber

Patch cord/ Pigtail

Indoors/ Outdoors (Premises) Cables

Outdoor Duct Cables

Outdoor Direct Burial Cables

Lightguide Interconnect Unit

Connectors

Adapters

Adapeter panels

VI.Tools

Puch Down Tools

Crimping Tool

Universal Stripping/ Cutting Tool

Fiber Field Termination Kit

VII . Computer Chair

VIII. Computer Tables

IX. Computer Racks

The goods mentioned in Sl.Nos. 1 to V viz Net working products, Internet working products and Digital Home Products (Hardware items) Cables made of copper and fiber (net work accessories) are taxable at 4 %, since the goods are coming under the category Computer systems and peripherals parts and accessories thereof and optical fibre cables, optical fibre & optical fibre bundles and cables.

The Tools which is made up of Iron and steels not coming under entry 2 of the schedule II of KGST Act 1963, and taxable at 8 % under entry 90 of the 1^st schedule to the Act, which is as follows. All metals, Alloys and metalic products other than those specified elsewhere in the schedule or in the second schedule.

Item Nos. VII, VIII and IX Computer chairs, Computer Table and Computer Racks made up of steel comes under entry no.64 of 1^st schedule to the KGST Act 1963, furnitures of all kinds whether sold as finished goods or in unassembled form taxable at 12 %.

Sd.

Commissioner

/Approved for Issue/

Deputy Commissioner (General)

To.

Sri.P.Santharam shenoy

Nayar & Menon, Chartered Accountants

1^st Floor, Kannammuriyil Bldgs.

Kochi. 682 018

C.C to All. Dy.Commrs

Registrar,CTS.Tvpm

PROCEEDINGS OF THE COMMISSIONER OF COMMERCIAL TAXES

THIRUVANANTHAPURAM

Present: V.Somasundaran.I.A.S

Sub:- KGST Act,1963-Clarification U/s. 59A- Trichur Town Gold Dealers Association-

Clarified- orders issued:-

Ref:_ 1. Application dt. 26.04.02 put in by Trichur District Gold and Silver Merchants

Association

2. Notice No.C3.16394/02/CT Dt. 19.06.02

ORDER No. C3.16394/02/CT Dt. 05.09.02

An application U/s. 59A of the KGST Act, 1963 was put in by the Trichur Gold and Silver Merchants Association, wherein the Association has requested to clarify the following points.

1. Whether the enhanced rate of tax of 4 % is for bullion only or for Gold also.

2. The enhanced compounding rate of 200 % is for newly started shops or to existing shops

3. Whether AST is Applicable for calculating the compounding system.

As per this office notice read as second paper above, the application was posted for hearing on 03..07..02. Instead of availing themselves of the opportunity of hearing the applicant as per letter dt. 29..06..02 informed that they have no further details to produce and requested for clarification as follows.-

i. The enhanced rate of tax of 4 % is applicable only to bullion and species and not to gold also.

ii. The compounding rate of 200% is applicable to all shops, irrespective of existing or new one provided the conditions stipulated in the Act are satisfied.

iii. AST is also applicable for calculating the compounding tax because tax payable includes AST also.

Sd/

Commissioner

/Approved for Issue/

Deputy Commissioner (General)

M/s. Trichur District Gold and Silver Merchants Asso.

Mission Quarters, Trichur - 680 001

C.C to All DCs

Registrar CTS, Tvpm

PROCEEDINGS OF THE COMMISSIONER OF COMMERCIAL TAXES

THIRUVANANTHAPURAM

Present: V.Somasundaran.I.A.S

Sub:- KGST Act 1963- M/s. Star Enterprises, Chennai- clarification U/s. 59A of the Act

-clarified orders issued- Reg:-

Read:- 1. Application filed in form 31D dt. Nil

2. Notice of even no. dt. 05..10..01 and 16..10.01

3. Lr. no. SE/135/CCT- Kerala /ODR.01-02 dt. 22.01.02 from Star Enterprises.

ORDER No. C3.50771/01/CT Dt. 05.09.02

Star Enterprises, Chennai are manufacturers of Solar Water heating system under the category of renewable Energy devices. They have supplied and executed works contract for solar water heating systems for Indian Oil Corporation Bottling plant at Cochin and for Southern Railway, Palakkad. Both of them have deducted tax at source and then only settled the bills. In the above circumstances, a clarification is sought for U/s. 59A of the KGST Act, 1963 as to whether they are eligible for 100 % tax exemption as their activities comprised of design, fabrication, Assembly, Manufacture, Inspection, Supply, Erection, Commissioning, Testing, Maintenance and after sales service, Repairs, Reconditioning and Rectification.

As per the notice read as second paper above, the petition was posted for hearing twice. The applicant did not turn up in person, instead filed the reply cited third above. So the case is disposed of on merits.

From the agreement executed between the petitioner company and Indian Oil Corporation and Southern Railway it is seen that the entire materials for the installation of solar water heating systems were being transferred to Kerala using their delivery notes and delivery chalan. Besides, in addition to the items of work specifically mentioned, the contract consists of other connected works such as supply, erection, testing and Commissioning anxillary water tanks and connections to many other places. The agreement also provides for inspection of the quality of materials used. From the above facts it is necessary to give clarification on different aspects such as sale of solar energy devices, transfer of materials, turnover relating to fabrication and installation, maintenance and after sales services, repairs, reconditioning, rectification etc, since the clarification sought for is whether the petitioner is eligible for 100 % tax exemption.

Of the above mentioned items sale of solar energy devices have been exempted as per entry 39 of schedule I to SRO. 1090/99 dt. 01..01..00. The works executed by the company viz. design, fabrication, assembly, manufacture, inspection, supply erection and testing come under "Fabrication and installation of Plant & Machinery" come under entry 11 of the IVth Schedule to the KGST Act 1963 taxable @ 12 %. The other aspects such as maintenance, after sales service, repairs, reconditioning etc, have been examined in the light of the following court decisions.-

Michael Vs State of Kerala 1994(2) KLT 78

Held that interstate transfer of property in goods being involved, there could be no levy of sales tax in relation to a works contract .

Dyanemic ILC Services (P) ltd Vs State of Kerala 1994 (2) KLT 188 (1995, 97 STC 564 Kerala)

Wherein it was held that chemicals being used by Petitioner only in air of the work undertaken by it as a cleaning agent for cleaning boilers in the plant and are extinguished in the process is a mere labour contract and is not sale, liable for tax .

Salaicate (Bangalore) Pvt. Ltd Vs STO 1997 (2) KLT 36, ILR 1997 (3) Kerala 638.

Where in it was held that a person executing works contract is a dealer and the transfer of property involved in the execution of such works contract is a sale.

R.K.Bbandu Vs State of Kerala and Others (7 KTR 156 Kerala)

Held that if the Goods involved in the execution of works contract are exempted either under schedule III or suffered first point tax in the state, awarders cannot deduct any amount from the bill.

Considering all these factors, the point sought for are clarified as follows:-

1. Sale of solar energy devices have been exempted as per entry 39 of schedule I to SRO. 1090/99 w.e.f 01..01..00. So the proportionate part of the turnover is to be exempted.

2. The turnover relating to "Fabrication and installation of the plant and machinery" is liable to be taxed @ 12 % as per entry 11 of schedule IV as per section 5 (C) of the KGST Act 1963, provided the applicant is a registered dealer under the said Act.

3. For maintenance and after sale-services there is no tax liability, if no transfer of goods were involved.

4. For repairs, reconditioning, rectification , if no transfer of goods, no liability to tax, otherwise if there is transfer of goods, the liability to tax will be to that extend.

Therefore the petitioner is not eligible for 100% tax exemption. The questions referred are clarified accordingly.

Sd/

Commissioner

/Approved for Issue/

Deputy Commissioner(General)

To.

M/s. Star Enterprises

23, Sixth Cross Street, Mahalakshmi Nagar

Adambakkam,Chennai 600 088

C.C to All Dy.Commrs

Registrar, CTS, Tvpm

PROCEEDINGS OF THE COMMISSIONER OF COMMERCIAL TAXES

THIRUVANANTHAPURAM

Present: V.Somasundaran.I.A.S

Sub:- KGST Act,1963- Clarification U/s. 59A -declined - orders issued:-

Ref:- 1. Application dt. 15.10.01 put in by Sri. K.P. Paul, M/s Sanjo Poultry Farm,

Muvattupuzha

2. Notice of even no. dt. 31.10.01,01.02.02, 18.04.02, 11.06.02 and 19.06.02

ORDER No. C3. 55759/01/CT dt. 06.09.02

Sri.K.P.Paul, M/s. Sanjo Poultry Farm, Muvattupuzha has put in an application U/s. 59A of the KGST Act, 1963, wherein he has requested to clarify whether the applicant, who is engaged in poultry farming the land of which is partly owned by him and partly by his father is entitled for exemption under SRO. 1090/99 read with SRO. 291/00 and SRO. 877/00

The Application was posted for hearing several times, but nobody turned up and availed of the opportunity of personal hearing. So the application is disposed of based on the materials available on record.

Scrutiny of the records revealed that the point sought for clarification has been considered by the Hon'ble High Court of Kerala in OP Nos. 935/02, 2142, 2334, 2371, 4292, 4680, 4740/02 dt. 30.05.02

As such issues cannot be considered for clarification U/s. 59 A(1) the application is rejected.

Sd/

Commissioner

/Approved for Issue/

Deputy Commissioner (General)

Sri.K.P.Paul

M/s Sanjo Poultry Farm,

Kottancharil House,

Mullapuzhachal .P.O

Muvattupuzha 686 670

PROCEEDINGS OF THE COMMISSIONER OF COMMERCIAL TAXES

THIRUVANANTHAPURAM

Present: V.Somasundaran.I.A.S
Sub:- KGST Act,1963- Clarification U/s. 59A -whether to consider magnesium

sulphate as a fertilizer or as a chemical-declined- orders issued- Reg;

Ref:- Request dt. 29.04.02 from Sri.K.A.Abdul Khader, M/s. Associated Trade

Links, Palace Road, Aluva

ORDER No.C3.23470/02/CT Dt.13..09..02

M/s. Associated Trade Links, Palace Road, Aluva has sought a clarification as to whether to treat magnesium sulphate as a fertilizer or as a chemical.

Authorised representative appeared and was heard. It was argued by the applicant that magnesium sulphate manufactured by the applicant is known, bought, sold and used as a fertilizer in common and commercial parlance.

It is ascertained that the issue has been agitated by the applicant before the appellate authorities and TRC is pending before the High Court of Kerala. The clarification sought for is thus not entertainable under section 59A (1) of the KGST Act.

Hence the request for clarification is declined.

Sd/

Commissioner

/Approved for issue/

Deputy Commissioner (General)

Sri.K.Jayachandran

Advocate and Tax Consultant

K.A.P. Commercial Centre

R.S. Road, Aluva 683 101.

PROCEEDINGS OF THE COMMISSIONER OF COMMERCIAL TAXES

THIRUVANANTHAPURAM

Present: V.Somasundaran.I.A.S

Sub:- KGST Act,1963- Application filed U/s. 59A- clarified orders issued:- Reg:

Read:- (1) Application dt. 25.07.01 filed by Sri.K.Kishore Babu, Accutech Design, Vadakkevila.P.O., Kollam

(2) Notice No.C3.68900/01/CT dt. 07.05.02.

ORDER No.C3.68900/01/CT dt. 13.09.02

Sri..Kishore Babu, Accutech Design, Vadakkevila, Kollam has filed an application U/s. 59A read with rule 39 D of the KGST Act and Rules requesting to clarify the rate of tax applicable under KGST Act ,1963 on the sales turnover of condom packing machine when sold to Hindustan Latex Ltd, Thiruvananthapuram.

In response to the notice issued Sri.N.Balakrishnan Nair, Advocate appeared on behalf of the applicant and was heard. He has requested to clarify the rate of tax of "Condom packing machine" in the light of SRO. 1091/99. Verification of the SRO, it is seen that in schedule III to the same ,the details of persons or organisations the rate of tax on the sale of goods to whom is reduced under sub-clause (3) of clause I are mentioned .According to serial number 3 to schedule III, the rate of tax of machinery sold to industrial units including Public Sector Undertakings for use in the manufacture or processing of goods by them or on job work basis within the State has been reduced to 3 %. The "Condom packing machine" intend to sold to M/s Hindustan Latex Ltd , has multiple components as well as multiple functions. In D.B.Bhandari Vs. State of Mysore 20 STC 25 it is held that machinery means some mechanical contrivances which by themselves or in combination with one or more mechanical contrivances, by combined movement and interdependent operation of their respective parts generate power or evoke, modify, apply or direct natural forces with the object in each case of effecting a definite and specific result. In view of the above facts the condom packing machinery when sold to M/s. Hindustan Latex Ltd, will be eligible for the concessional rate of 3 %.

The issue is clarified accordingly.

Sd/

Commissioner

/Approved for Issue/

Deputy Commissioner (General)

Sri.N.Balakrishnan Nair, Advocate

Quilon Tax Chamber ,

West of Civil Station, Kollam 13

CC to All DCs

Registrar CTS, Tvpm

PROCEEDINGS OF THE COMMISSIONER OF COMMERCIAL TAXES

THIRUVANANTHAPURAM

Present: V.Somasundaran.I.A.S

Sub:- KGST Act 1963- Clarification U/s. 59A sought for in respect of the rate of tax of

insulating varnishes which is used for circuit boards transformer etc-orders issued-

reg:

Ref:- Application dt. 18.10.01 from M/s. Gillanders Arbuthnot and Co.Ltd, SRM Road,

Cochin- 18

ORDER No. C3.22310/01/CT DT.12.09.02

M/s. Gillanders Arbuthnot and Co. Ltd. Cochin has sought a clarification as to the rate of tax applicable to insulating varnishes which are used for circuit boards and transformers.

In response to the notice authorised representative of the company appeared and was heard. He has requested to clarify the correct rate of tax for the sale of insulating varnishes which are used for circuit boards and transformers which on perusal of the schedule it appears to be taxable at the rate of 15 % w.e.f 01..01..00. In view of the decision reported in the case M/s. Mariamman Industries Vs State of Tamil Nadu reported in 61 STC 358 MAD 1986, Armature coil winding oil when it is manufactured by an assessee and is used only as an adhesive in the process of armature coil winding and not for polishing any surface cannot be classified adopting the popular meaning as varnish and brought to tax but liable to tax only multi point rate. Further requested in view of the above decision needs further clarification to the order no. C5. 31196/00/CT dt. 01.03.01.

Entry No. 103 of the first schedule to the KGST Act 1963 namely- Paints, colours laquers, varnishes, pigments, polishes, indigo, dyes, enamel, putty, bale oil, turpentine oil wood preservation oil (Primers and thinners). The entry covers varnishes. By applying the principle of ejusdem generis the entry does not distinguish varnishes used for circuit boards transformers etc. So varnishes of all kinds irrespective of the use to which they are put will fall under entry 103 of the first schedule to the KGST Act 1963 liable to tax @ 15% from 01..04..00 onwards.

The point referred to me is clarified accordingly.

Sd/

Commissioner

/Approved for Issue/

Deputy Commissioner (General)

To.

Sri.P.S.Joseph Antony (Roy)

Advocate, Old Railway Station Road

I.S.Press Road,North End, Cochin 682 018

C.C to All. Dy. Commrs.

Registrar, CTS,Tvpm

PROCEEDINGS OF THE COMMISSIONER OF COMMERCIAL TAXES

THIRUVANANTHAPURAM

Present: V.Somasundaran.I.A.S

Sub:- KGST Act 1963- Application filed by M/s. Speed -A- Way Ltd U/s.59A- Clarified-

orders issued:-

Read:- 1. Application in form 31D dt. 30.06.01

2. Notice No.C3.32237/01/CT dt.05.10.01

ORDER No.C3.32237/01/CT Dt.25.09.02

M/s. Speed- A- Way Ltd, Palarivattom has filed an application under section 59A read with Rule 39D of the KGST Act 1963, requesting to clarify the rate of sales tax for Axle shafts in Kerala.

As per the notice read as second above the application was posted for hearing on 12.10.01. On that day Sri.K.Rajendran, Branch Manager appeard and was heard. He argued mainly based on the dictum of the Hon'ble Supreme Court in 102 STC. 67 Dewan Enterprises Vs. Commissioner of Sales Tax UP wherein the Court held that by applying the common parlance Test the item would come under entry (XIV) and being declared goods the same cannot be taxed at the rate in excess of 4 %.

I have examined the matter in detail with reference to the relevant provisions of the KGST and CST Acts. Section 14 of the CST Act 1956 enumerates the list of goods of special importance in interstate trade and commerce in which entry XIV includes wheels, tyres, axles and wheel sets. These declared goods can only be taxed at a single point not exceeding a rate of 4 %. Further the apex court also held that the impugned items being declared goods the same cannot be taxed at a rate in excess of 4 per cent.

For the above reasons stated it taxed is clarified that axle shafts is an item taxable @ 4 % as per 2^nd schedule of the KGST Act.

The issue referred to me is clarified as above.

Sd/

Commissioner

/Approved for Issue/

Deputy Commissioner(General)

To.

M/s. Speed-A-way (P) Ltd

34/2294- A,N.H.47 Highway

Mamangalam,Palarivattom

Kochi- 682 025

C.C to All Dy. Commrs

Registrar,CTS,Tvpm

PROCEEDINGS OF THE COMMISSIONER OF COMMERCIAL TAXES

THIRUVANANTHAPURAM

Present: V.Somasundaran.I.A.S

Sub:- KGST Act 1963- Application U/s. 59A filed by M/s. Sakthi Enterprises, Alappuzha- clarified orders- issued:

Read:- Application dt. 26.06.01 .

ORDER NO. C3.35874/01/CT Dt. 25.09.02

M/s. Sakthi Enterprises, Church Road, Alappuzha has filed an application U/s. 59A read with Rule 39D of the KGST Act and Rules 1963 requesting to clarify the rate of tax applicable to pumpsets for the years 1996-97 to 2001-02.

Verification of the relevant records revealed that the same issue has been appealed against before the Appellate Asst. Commissioner, Alappuzha and orders also passed by the Appellate Authority as per order No. STA 200/2001 dt. 27.09.01. According to section 59A of the Act a dispute arising otherwise than in a proceedings before any appellate or revisional authority or in any court or tribunal is entertainable by the Commissioner. In this case since the same issue is appealed against before the Appellate Asst. Commissioner, Alappuzha, exercise of power U/s. 59A is precluded by Law..

The request is therefore declined.

Sd/

Commissioner

/Approved for Issue/

Deputy Commissioner(General)

To.

Sri.V.K.Mukundan Nair

STP. No. 481

Thamara Buildings

Nr. Medical College Hospital Jn

Alappuzha

PROCEEDINGS OF THE COMMISSIONER OF COMMERCIAL TAXES

THIRUVANANTHAPURAM

Present: V.Somasundaran.I.A.S

Sub:- KGST Act 1963- Clarification U/s. 59A- applicability of Purchase tax and

AST on natural rubber- Orders declined- reg:-

Read:- Request from the Indian Rubber Dealers Federation, Kottayam dt. 09.05.02.

ORDER No.C3.20047/02/CT dt. 01.10.02

The Indian Rubber Dealers Federation, Kodimatha, Kottayam has sought clarification as to the applicability of purchase tax of 11 % and AST of 15 % in respect of agency Stock Transfer/ Branch Transfer of Natural Rubber to other states. Further they wish to clarify whether `F' form and C form are mandatory in interstate transactions and whether any additional tax liability is applicable in interstate sale other than purchase tax and AST.

In response to the notice dt. 26.08.02 Sri.Thomas P.Oommen, the authorised representative appeared and was heard. Since the subject matter in which clarification sought for relates to CST Act, clarification cannot be issued under section 59A of the KGST Act 1963.

Therefore the request for clarification is declined.

Sd/

Commissioner

/Approved for Issue/

Deputy Commissioner(General)

To.

The Indian Rubber Dealers Federation

Rubber Bhavan

Kodimatha, Kottayam 39

PROCEEDINGS OF THE COMMISSIONER OF COMMERCIAL TAXES

THIRUVANANTHAPURAM

Present: V.Somasundaran.I.A.S

Sub:- KGST Act 1963- Clarification sought for U/s. 59A of the KGST Act-

Clarified- orders issued:-

Ref:- 1.Application dt. 02.11.01 filed by M/s. Mehra Computer Systems Ltd, Cochin.
2. Notice No. C3.59473./01/CT dt. 07.05.02

ORDER No.C3.59473/01/CT dt. 25.09.02

M/s. Mehra Computer Systems Ltd, Paliam Road, Cochin has put in an application U/s. 59A of the KGST Act 1963 read with Rule 39D of the KGST Rules 1963 requesting to clarify the rate of tax of the product sold by them, sample of which was attached with the application.

The application was posted for hearing 23.05.02. Sri.C. Neelakantan Kartha appeared and was heard. He argued that the paper sold by them was exclusively for computer work.

The sample produced has been verified with reference to the different schedule to the KGST Act and Rules. It isseen that paper has only a simple entry under entry 106(1) of 1^st schedule and computer paper, sample of which was furnished, will also come under entry 106(1) of 1^st schedule taxable @ 8 %.

So the product sold by the applicant is clarified as taxable at the rate of 8 %.

The question referred to is clarified as above.

Sd/

Commissioner

/Approved for Issue/

Deputy Commissioner(General)

To.

Sri.C. Neelakantan Kartha.

Advocate, 39/5398 B

Chithirasree. Alappatt Cross Rd.

Ravipuram, Cochin 682 016

C.C to All. Dy. Commrs Registrar,CTS,Tvpm

PROCEEDINGS OF THE COMMISSIONER OF COMMERCIAL TAXES

THIRUVANANTHAPURAM

Present: V.Somasundaran.I.A.S

Sub:- KGST Act,1963- Clarification U/s. 59A-Whether Entry Tax is applicable to Pick and Carry Cranes and its spare parts- application rejected- orders

declined- reg:-

Ref:- Application in Form 31D dt. 31.08.02 from M/s. T.V.Sundram Iyengar &

Sons Ltd, Kaimanam.P.O, Neeramankara, Thiruvananthapuram.

ORDER No.C3.40668/02/CT Dt. 04.10.02

M/s.T.V.Sundram Iyengar and Sons Ltd, Thiruvananthapuram has sought a clarification as to whether Entry Tax is applicable of Pick and Carry Cranes and its spare parts,

Since clarification relating to matters of Entry Tax cannot be issued U/s. 59A of the KGST Act, 1963 the request for clarification submitted by the applicant is declined.