Sales Tax is Leviable on Sale of REP License: Madras HC [Read Judgment]

Assessment Penalty - gross total income - Taxscan

The Madras High Court, in M/s. Alsa Marine & Harvests Limited v. The Sales Tax Appellate Tribunal & Anr, upheld the levy of sales tax on sale of REP license under the provisions of the Tamil Nadu General Sales Tax Act (TNGST).

In the instant case, the Assessing Officer held that is payable on the sale of REP License. Under this Scheme of REP license, exporter of goods was given benefit to replenish his stocks of inputs by importing the same without payment of customs duty, used in the exports made by him. In other words, an exporter making export of goods by using domestic inputs on which excise duty has been paid is given the facility to import inputs without payment of customs duty, which virtually replenish the input stocks used by the exporter in making that export. The said REP licenses were transferable.

On appeal, the Tax Appellate Tribunal also confirmed this view.

Aggrieved by the order, the appellant approached the High Court.

Justice T S Sivagnanam upheld the order of the department by relying on the decision in M/s. Prakash Impex V. The State of Tamil Nadu represented by the Assistant Commissioner (CT) wherein the Court upheld the validity of levy of sales tax on DEPB license.

Read the full text of the Judgment below.