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of <h1>Court Upholds Tax on Tractor Parts as Accessories, Not Essential Attachments</h1> The court dismissed the appeals challenging the levy of tax on 'tractor hood' and 'front bumper' as accessories under the Madhya Pradesh Value Added Tax ... Classification of goods - Rate of tax on accessories - “tractor hood” and “front bumper” - whether subjected to VAT @ 13% in terms of Entry No.90 in Part II of Schedule II of the Act 2002 or otherwise? - HELD THAT:- Entry 90 of Part II of Schedule-II relates to “Tractors, Power Tillers, Threshers, Harvesters, Attachments and parts (including tyres, tubes and flaps) thereof.” The “attachments and parts thereof” must be such as without which the Tractors, Power tillers, Threshers, Harvesters cannot be put to use. The 'bumpers' and 'hoods' may add to the convenience or effectiveness but are not essential in themselves as to without which the Tractors, which we are presently concerned with, cannot work. In PRAGATI SILICONS PVT. LTD. VERSUS COMMISSIONER OF C. EX., DELHI [2007 (4) TMI 263 - SUPREME COURT] while dwelling on the issue as to “whether “plastic nameplates” are classifiable under headings 87.08 and 87.14 by falling within the scope of term “parts and accessories” of motor vehicle”, their Lordships, were pleased to hold that It is evident therefore, that an “accessory” by its very definition is something supplementary or subordinate in nature and need not be essential for the actual functioning of the product.” In the case at hand, the classification/categorization of “bumper” and “hoods” arrived at by the Assessing Authority and upheld by the Tribunal that it is not an attachment of the Tractor when tested on the anvil of above analysis cannot be faulted with. Appeal dismissed - decided against appellant. Issues:Levy of tax on 'tractor hood' and 'front bumper' as accessories under VAT Act.Analysis:The judgment concerns appeals under Section 53 of the Madhya Pradesh Value Added Tax Act, 2002, challenging an order by the Commercial Tax Appellate Board regarding the levy of tax on specific parts treated as accessories under the Act. The dispute revolves around whether the 'tractor hood' and 'front bumper' should be taxed at 13% as accessories or at 5% when sold with the tractor. The appellants argue that the parts should be considered inseparable from the tractor and taxed at the lower rate.The crux of the issue lies in the interpretation of Entry No.90 in Part II of Schedule II of the Act, which specifies the tax rate for tractors and their attachments and parts. The appellants contend that since the parts in question are attachments of the tractor, they fall under Entry No.90, attracting a tax rate of 5%. They argue that the specific entry prevails over the general residual entry in Part IV, which applies a 13% tax rate to goods not covered elsewhere.The judgment delves into the distinction between 'attachments' and 'accessories' under the Act. It highlights that the inclusion of the term 'accessories' in Entry No.90 from 01.04.2015 altered the tax treatment, emphasizing that accessories are secondary and non-essential items. Citing legal precedents, the court emphasizes that the predominant or ordinary purpose of an item determines its categorization. In this context, the court analyzes the essential nature of bumpers and hoods for the functioning of tractors.Drawing on case law, including 'Union of India v. Garware Nylons Ltd.' and 'Pragati Silicons (P) Ltd. v. Commissioner of Central Excise,' the judgment underscores that accessories need not be essential for the functioning of the product. Applying this principle to the case at hand, the court upholds the classification of bumpers and hoods as non-essential attachments, affirming the decision of the Assessing Authority and the Tribunal.Ultimately, the court dismisses the appeals, ruling that no substantial question of law necessitates further consideration. The judgment concludes that the tax treatment of the tractor parts as accessories at 13% is appropriate, and the appeals are thus rejected without costs.
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