Sales Tax Incentive Scheme - Supreme Court Judgement - CBEC Instructions
THE CBEC invites the attention of all Chief Commissioners to the decision of the Supreme Court in Super Synotex India Ltd. - on the issue of abatement of sales tax under an Abatement Scheme where the assessee was allowed to retain 75% of the sales tax collected from the buyer and was required to deposit only the remaining 25% with the State Government. Under the circumstances, the Supreme Court held that after 01.07.2000 i.e. under the transaction value regime, 75% of the sales tax retained by the assessee would form part of the assessable value.
The Board states that this is an important judgment on the issue and may be brought to the notice of the trade and the assessing officers for finalisation of similar cases.
We reported this judgement on 03.03.2014 - more than six months ago. While reporting this case DDT had observed,
An Impossible Mathematics: This is not the end of the story - calculation of excise duty and sales tax is going to be impossible. Sales tax is calculated on the value plus excise duty. Now you add up sales tax to the value, excise duty goes up and when excise duty goes up, Sales Tax goes up, part of which should again be added to value; then value goes up excise duty goes up and sales tax goes up - and so they go perennially.
A Consultant commented: Department takes settled cases to Supreme Court only with a hope to disturb the settled law..and they are successful!
CBEC Instruction in F.No. 6/8/2014-CX.1., Dated: September 17, 2014