Tag Archives: Excise

Tax and Cess – Distinction

In the case of Vijayalakshmi Rice Mill v. Commercial Tax Officers, Palokal, (2006) 6 SCC 763, a distinction was sought to be drawn between ‘Cess’ and ‘Tax’ in the following terms:

“Hence ordinarily a cess is also a tax, but is a special kind of a tax. Generally tax raises revenue which can be used generally for any purpose by the State. For instance, the Income Tax or Excise or Sales Tax which generate revenue can be utilized by the Union or State Governments for any purpose, e.g. for payment of salary to the members of the armed forces or civil servants, police, etc. or for development programs, etc. However, cess is a tax which generates revenue which is utilized for a specific purpose. For instance, health cess raises revenue which is utilized for health purposes, e.g., building hospitals, giving medicines to the poor etc. Similarly education cess raises revenue which is used for building schools or other educational purposes. Gujarat Ambuja Exports Ltd. v. State of Uttarakhand, (2016) 1 UPLBEC 627.

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Filed under Cess, Tax, Uncategorized

Valuation of Goods – Point of Sale

The principle of law, thus is crystal clear. It is to be seen as to whether as to what point of time sale is effected, namely, whether it is on factory gate or at a later point of time, i.e., when the delivery of the goods is effected to the buyer at his premises. This aspect is to be seen in the light of the provisions of the Sale of Goods Act by applying the same to the facts of each case to determine as to when the ownership in the goods is transferred from the seller to the buyer. The charges which are to be added have put up to the stage of transfer of that ownership inasmuch as once the ownership in goods stands trabsferred to the buyer, any expenditure incurred thereafter has to be on buyer’s account and cannot be a component which would be included while ascertaining the valuation of the goods manufactured by the buyer. Commissioner, Customs and Central Excise v. Roofit Industries Ltd., (2015) 8 SCC 229.

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Filed under Indirect Tax, Valuation of Goods