The Department of Commercial Taxes has recently through Order No.C3/34789/15/CT Dated 9/3/2016 clarified that the rate of ‘Thermocol Disposable Plates’ is 20% w.e.f. 1.04.2015. The said product was was taxable at RNR by virtue of Entry 103 of S.R.O. No. 82/2006 during the periods prior to 1/4/2015.
The said clarification was issued by the Department on an application filed by M/s. Mas Make Polymers, Palakkad u/s 94 of the KVAT Act, 2003 seeking clarification on the rate of tax thermocol disposable plate during the years 2013-14 & 2014-15.
The applicant contended that Thermocol fell under Entry 174(8) of List A of the Third Schedule to the Kerala Value Added Tax Act, 2003. However, by the Kerala Finance Act, 2013, the said product was inserted in the schedule under 3A which reads as “Disposable plates, cups, and leaves, made of plastic”. The rate prescribed for the product was fixed at 20%.
However, the provision, Entry 3A of the Table under Section 6(1) of the Act was again subjected to amendment i.e., “Disposable plates, cups, and leaves, made of plastic, including styrofoam and styrofoam sheets” without any change in the rate prescribed. Therefore, the submission of the applicant was that where the words ‘including styrofoam and styrofoam sheets’, which goes along with ‘made of plastic’, was inserted only with effect from 1/4/2015, disposable plates made of styrofoam and styrofoam sheets came to be included in the Table under Section 6(1) of the Act only with effect from 1/4/2015. The applicant has, therefore, requested to clarify the rate of tax of the commodity for the period, 2013-14 and 2014-15.
It was observed that an examination of Entry 174(8) of the List A of the Third Schedule to the Kerala Value Added Tax Act, 2003, would show that the intention of the Legislature was to include only packing materials and articles for conveyance or packing of goods within the ambit of the above Entry. The impugned commodity is not a packing material and hence, would not fall within the ambit of the above-said entry. Further, none of the entries in any of the Schedules to the Act are suitable for incorporating the commodity.
It was, therefore, clarified that the commodity in dispute viz. ‘thermocol disposable plate’ was taxable at RNR by virtue of Entry 103 of S.R.O. No. 82/2006 during the periods prior to 1/4/2015. Therefore from 1/4/2015, it would be taxable at the rate of 20% by virtue of Serial No. 3A of the Table to subsection (1) of Section 6 of the Kerala Value Added Tax Act, 2003.
Read the clarification below.
