TaxTMI Login
Just a moment...
Press 'Enter' to add multiple search terms. Rules for Better Search
When case Id is present, search is done only for this
of 
of 
No Folders have been created
Are you sure you want to delete "My most important" ?
NOTE:
of of 
All Case Laws
of of All Case Laws
Note
Bookmark
Share
Don't have an account? Register Here
of <h1>High Court clarifies import license tender as sale of goods under Sales Tax Act. Transferring attracts tax; returning for cancellation exempt.</h1> <h3>The Commissioner of Sales Tax thru' the State of Maharashtra Versus M/s Mukund Limited</h3> The Commissioner of Sales Tax thru' the State of Maharashtra Versus M/s Mukund Limited - TMI Issues:Interpretation of sales tax liability on import licenses called REP licenses/Exim Scrips under the Bombay Sales Tax Act.Analysis:The High Court of Bombay was tasked with deciding whether the tender of import licenses, REP licenses/Exim Scrips, by the holder after the discontinuance of the Import Export Policy constitutes a sale of goods under the Bombay Sales Tax Act. The issue was whether the amount of premium paid on these licenses is subject to sales tax. The Court noted that the issue had already been settled by the Supreme Court in a previous case involving the State Bank of India. The Supreme Court had held that when these licenses are transferred or assigned for consideration, they qualify as 'goods' and are subject to sales tax. However, if the licenses are returned for cancellation or extinction, they lose their marketable value and do not attract sales tax.The Supreme Court clarified that when the State Bank of India acted as an agent of the Reserve Bank of India in canceling the licenses, they did not purchase any goods but merely followed directions to nullify the licenses. The Court emphasized that the purpose was to remove the licenses from the market, not to acquire them as goods. It was established that the initial issue or grant of the licenses did not transfer ownership in the goods, and when the licenses were returned for cancellation, they were not treated as marketable commodities purchased by the grantor. As the State Bank of India was acting as an agent of the RBI, the ownership in the goods was never transferred to them.In conclusion, the High Court of Bombay disposed of the reference in light of the Supreme Court's judgment, which had already settled the issue regarding the sales tax liability on import licenses like REP licenses/Exim Scrips. The Court reiterated the Supreme Court's ruling that the transfer or assignment of these licenses for consideration attracts sales tax, but when returned for cancellation, they do not constitute goods subject to sales tax.
TaxTMI 
TaxTMI 
