Government of India
Ministry of Finance
Department of Revenue
Central Board of Excise and Customs
Dt: 17.09.2014
To
The Chief Commissioners of Central Excise (All)
Sub: Instructions in light of Judgment of Hon’ble Supreme Court on Sales
Tax Incentive Scheme-reg.
Kind attention is invited to the judgment of Hon’ble Supreme Court in case of
M/s Super Synotex India Ltd. [2014-TIOL-19-SC-CX] on the issue of abatement of
sales tax under an abatement scheme where the assesse 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, Hon’ble Court
held that after 01.07.2000 i.e. under the transaction value regime, 75% of the
sales tax retained by the assesse would form part of the assessable value,
stating as follows in the paragraph 22,
“ The amount paid or payable to the State Government towards sales tax,
VAT, etc. is excluded because it is not an amount paid to the manufacturer
towards the price, but an amount paid or payable to the State Government for
sale transaction, i.e. transfer of title from the manufacturer to a third party.
Accordingly, the amount paid to the State Government is only excludible from the
transaction value. What is not payable or to be paid as sales tax/VAT, should
not be charged from the third customer/party but if it is charged and is not
payable or paid, it is a part and should not be excluded from the transaction
value. This is the position after the amendment, for as per the amended
provisions the words “transaction value” mean payment made on actual basis or
actually paid by the assesse. The words that gain significance are “actually
paid”. ”
2) For further details the judgment may kindly be referred. 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. Hindi version will follow.
Difficulty, if any, in the implementation of the instruction may be brought to
the notice of the Board.
Yours faithfully,
(ROHAN)
OSD CX-6
Copy to: Members of the Board
F. No. 6/8/2014-CX.1