State Governments are now free to levy VAT on Sugar and Textiles

The Union government has allowed the states to impose tax on sugar and textiles for the first time in 54 years.
In  the finance Act of 2011 the Additional Duties of Excise (goods of special importance) Act, 1957 has been amended.  Sugar and textile have been removed from the first schedule of the said Act.

After this amendment, states are free to levy value added tax on sugar and textile.These commodities  were put under the scheduled commodities, with the enactment of the Additional Duties of Excise Act in 1957 by the Nehru government.



Earlier, the Centre could only levy this tax on these commodities and the State Govt. had no power to levy tax on these goods. But after the said amendment the State Govts can now levy vat on Sugar and textiles.

The relevant amendment in the Finance Act 2011 contains in the Thirteen schedule of the Finance Act which are produced herebelow for ready reference:


THE THIRTEENTH SCHEDULE
(See section 78)
In the First Schedule to the Additional Duties of Excise (Goods of Special Importance) Act, 1957,—
(a) heading 1701 and all sub-headings and tariff items thereof and the entries relating thereto shall be omitted;
(b) tariff item 1702 90 10 and the entries relating thereto shall be omitted;
(c) headings 5007, 5111, 5112, 5208, 5209, 5210, 5211, 5212, 5407, 5408, 5512, 5513, 5514, 5515, 5516, 5801, 5802, 5803, 5804, 5806, 5810, 5901, 5902, 5903, 5907, 6001, 6002, 6003, 6004, 6005 and 6006 and all sub-headings and tariff items thereof and the entries relating thereto shall be omitted.



 
Posted by AMIT BAJAJ ADVOCATE at 10:11 PM

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