Additional sales tax counts in the State rate for inter-State sales tax liability under section 8(2-A).

Where inter-State sales tax under section 8(2-A) of the Central Sales Tax Act is tied to the rate payable under the sales tax law of the appropriate State, an additional sales tax imposed by the State is treated as part of that same tax structure. The enhanced State rate must therefore be included when determining the applicable Central sales tax liability. The Punjab and Haryana High Court treated the additional levy as part of the original sales tax and not as a separate charge outside the State tax base, with the result that the higher rate applied in favour of the Revenue.

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Issues: Whether additional tax levied under the Punjab General Sales Tax Act, 1948 forms part of the tax base for determining the rate applicable to inter-State sales under section 8(2-A) of the Central Sales Tax Act, 1956.

Analysis: The controlling principle applied was that the rate applicable to inter-State sales, where section 8(2-A) operates, is linked to the rate of tax payable under the sales tax law of the appropriate State. Additional sales tax imposed by the State legislation was treated as part of the same category of sales tax, not as a distinct levy outside the State sales tax law. Since the local rate stood enhanced by the additional tax, that enhanced rate had to be taken into account while determining the inter-State sales tax liability.

Conclusion: The additional tax forms part of the original tax and enhances the rate applicable to inter-State sales. Section 8(2-A) of the Central Sales Tax Act, 1956 does not exclude the additional rate of tax; the answer is in favour of the Revenue.

Ratio Decidendi: Where inter-State tax liability is linked to the rate under the sales tax law of the appropriate State, an additional sales tax levied by the State is part of that rate and must be included in determining the applicable Central sales tax rate.

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