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2018 (4) TMI 1486 - HC - VAT and Sales Tax


Issues:
- Interpretation of depot charges under the Maharashtra Value Added Tax Act, 2002.
- Inclusion of depot charges in the sale price of Motor Vehicles under Section 2(25) of the Act.

Analysis:
1. The Appeals challenged the order of the Maharashtra Sales Tax Appellate Tribunal regarding the inclusion of depot charges in the sale price of Motor Vehicles under the Maharashtra Value Added Tax Act, 2002. The appellant raised questions on the justification of considering depot charges as liable under the Act and whether such charges should be included in the sale price until registration is obtained by the buyers.

2. The primary issue revolved around whether the depot charges collected by the appellant, which are handling and warehouse charges for post-sale activities until registration, should be part of the sales price of Motor Vehicles taxable under the Act. The appellant contended that these charges are not part of the sale price under Section 2(25) of the Act, citing a previous court decision in their favor.

3. The definition of sale price under Section 2(25) of the Act includes any valuable consideration paid to a dealer for a sale, along with sums charged for activities done by the seller before delivery of goods. The Tribunal held that depot charges fall within the ambit of the sale price definition as they are charged for pre-delivery activities related to Motor Vehicles.

4. The Tribunal distinguished a previous court decision cited by the appellant, stating that the Supreme Court ruling in Commissioner of Commercial Taxes Vs. M/s. KTC Automobiles clarified that a motor vehicle becomes ascertained goods only at the time of registration. Until then, the vehicle remains unascertained, and charges for activities before registration, like depot charges, are part of the sale price.

5. The Court further emphasized that the sale of a motor vehicle is deemed complete only upon appropriation to the contract of sale near the office of the Registering Authority. As such, depot charges for activities before delivery are integral to the sale price under the Act, as per the plain meaning of the definition of sale price.

6. Ultimately, the Court concluded that the questions raised by the appellant were settled by the Supreme Court's decision in KTC Automobiles, and there was no substantial question of law to entertain. The Appeals were dismissed, upholding the inclusion of depot charges in the sale price of Motor Vehicles under the Maharashtra Value Added Tax Act, 2002.

 

 

 

 

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