Levy of entry tax on excavators, considering them motor vehicle unconstitutional
entry tax on excavators is unconstitutional:
Entry tax on excavator considering them motor vehicle is unconstitutional. Held by Gujrat High court.
In case of- M H KHANUSIYA
Versus
STATE OF GUJARAT
Facts of the case:
“That the petitioner is duly registered under the Gujarat Value Added Tax Act, 2003 (hereinafter referred to as “the VAT Act”. That on sale of Excavators within the State of Gujarat, the State Government levies entry tax on import/entry of Excavators into the State of Gujarat under the provisions of the Gujarat Tax on Entry of Specified Goods into the Local Areas Act, 2001 (hereinafter referred to as “Entry Tax Act”).”
This levy is held to be unconstitutional.
“Now, so far as a submission on behalf of the State that levy of 12.5% entry tax on Excavators, the petitioner is
not likely to be affected as the petitioner shall be entitled to now Input Tax Credit under Rule 15(7) read with section 11 of the VAT Act and therefore, not to strike down levy of entry tax at the rate of 12.5% treating them as motor vehicles is
concerned, on the aforesaid ground, levy, if any, found to be illegal, cannot sustain.”
Copy of order is also attached.
Further added that:
“Once levy itself is held to be illegal, unconstitutional and/or contrary to the objects and purpose of Entry Tax Act, there is no question of first to pay such a tax and thereafter to get a refund by way of Input Tax Credit. Why should importers be forced to first pay Entry Tax which otherwise is illegal and/or discriminatory and thereafter to go for a refund by way of input Tax Credit?”
This is a landmark decision. It is going to have a long-lasting impact. As the excavators are covered in a separate entry
If you already have a premium membership, Sign In.
Consultant
