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<h1>Entry tax on packing materials like tea lamination pouches deemed incorrect; VAT already covers costs, orders quashed.</h1> The HC determined that the levy of entry tax on packing materials, such as lamination pouches used for tea, was incorrect under the Entry Tax Act. It ... Levy of tax on sales - tea put in the packing material, lamination pouch, and sold in the State of Assam - HELD THAT:- Whenever a product is sold with a packing material VAT is collected on the sale price, which inferably includes the cost of packing material and the contents and the product is sold in a packing condition VAT is collected on the sale price; therefore, when the VAT is paid on such product, which includes the packing material and the packing material being the one of the specified goods as Entry 45, question of levy of entry tax on the packing material does not appear to be correct under the Entry Tax Act. The impugned orders passed are quashed - Petition allowed. Issues involved: Interpretation of Section 10(2) of the VAT Act in relation to levy of entry tax on packing material sold along with goods.In the present case, the petitioner imports lamination pouches, which are considered as packing material under Entry 45 of the Schedule. The tea is put in these lamination pouches and sold both within and outside the State of Assam. The crux of the matter lies in the interpretation of Section 10(2) of the VAT Act, which states that when goods are sold along with packing material, the tax shall be levied on the sale of the container and packing materials at the applicable rate. However, if the goods are tax-free, the sale of the container or packing materials shall also be exempt from tax.The Court observed that VAT is collected on the sale price of a product which includes the cost of packing material, and when the product is sold in a packing condition, VAT is collected on the sale price. Therefore, when VAT is paid on such a product, including the packing material, and the packing material falls under the specified goods as per Entry 45, the levy of entry tax on the packing material does not seem to be correct under the Entry Tax Act. Consequently, the petition was allowed, and the impugned orders were quashed.
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