State rate under Central sales tax includes additional tax on goods sales, preserving parity with local tax rates.

For section 8(2)(b) of the Central Sales Tax Act, the State rate includes the additional tax leviable under section 4A of the Gujarat Sales Tax Act. The additional tax, despite being given a distinct statutory identity and separated from sales tax by definition, remains a tax on the sale and purchase of goods and therefore a commodity tax. Excluding it from the intra-State rate would undermine the legislative policy that Central sales tax on inter-State sales should not be lower than the corresponding local tax rate. The Gujarat High Court held that the additional tax had to be included in determining the applicable State rate.

---

---

Issues: Whether, for the purposes of section 8(2)(b) of the Central Sales Tax Act, 1956, the rate of tax applicable inside the appropriate State includes the additional tax leviable under section 4A of the Gujarat Sales Tax Act, 1969.

Analysis: The rate under section 8(2)(b) is determined by reference to the tax applicable to intra-State sales of the goods in the appropriate State. The additional tax levied under section 4A, though given a distinct identity by the amendment to the definition of "tax" and by the insertion of the definition of "additional tax", remains a tax on the sale and purchase of goods. The statutory fiction separating additional tax from sales tax does not alter its character as a commodity tax. Excluding it from the State rate would defeat the legislative policy underlying section 8(2)(b), which is to ensure that Central sales tax on such inter-State sales is not lower than the corresponding local rate.

Conclusion: The additional tax under section 4A had to be included while determining the rate applicable under section 8(2)(b); the question was answered in the negative and in favour of the Revenue.

---