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of <h1>Classification of 'Rich's Whip Topping' under VAT Act upheld, subject to standard tax rate.</h1> <h3>Rich Graviss Products Pvt. Ltd. Versus State of Andhra Pradesh</h3> Rich Graviss Products Pvt. Ltd. Versus State of Andhra Pradesh - [2013] 57 VST 78 (AP) Issues:1. Classification of the product 'Rich's Whip Topping' under the Andhra Pradesh Value Added Tax Act, 2005.2. Whether the product is considered a raw material and/or an industrial input.3. Determining if the product falls under entry 100 of Schedule IV or the residuary entry of Schedule V to the VAT Act.Issue 1: Classification under the VAT ActThe case involved a tax revision petition against an order by the Sales Tax Appellate Tribunal regarding the classification of 'Rich's Whip Topping' under the Andhra Pradesh Value Added Tax Act, 2005. The petitioner contended that the product, used in bakery and confectionary industries, should be taxed at 4% under entry 100(4) of Schedule IV, not at 12.5% under the residuary entry of Schedule V. The Authority for Clarification and Advance Ruling initially ruled in favor of the higher tax rate, a decision upheld in a review petition and by the Tribunal.Issue 2: Raw material or industrial inputThe petitioner argued that 'Rich's Whip Topping' is an industrial input made from edible vegetable oils and fats, not a consumable item. However, the respondent contended that the product, a combination of various ingredients including water, fats, sugar, and emulsifiers, does not qualify as a raw material or industrial input. The court examined the manufacturing process and relevant legal precedents to determine the nature of the product.Issue 3: Classification under Schedule IV or Schedule VThe court analyzed the definitions of Schedule IV and Schedule V of the VAT Act to ascertain the appropriate tax rate for 'Rich's Whip Topping.' Despite the petitioner's reliance on specific legal cases and the amendment to entry 100 of Schedule IV, the court concluded that the product did not meet the criteria for entry 100(4) and fell under the residuary Schedule V, subject to the standard tax rate of 12.5%. The court dismissed the tax revision case, upholding the decision of the Tribunal and the Ruling Authority.In conclusion, the judgment clarified the classification of 'Rich's Whip Topping' under the Andhra Pradesh VAT Act, emphasizing the distinction between industrial inputs and consumable goods while applying the relevant provisions of Schedule IV and Schedule V to determine the applicable tax rate.
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