CCI Online Learning
What do you want to learn today?
     
CIBIL

Share on Facebook

Share on Twitter

Share on LinkedIn

Share on Email

Share More

Supply to high seas vessel is liable to VAT if any territorial nexus exist in the State


Court :
High Court of Bombay

Brief :
The Hon’ble High Court of Bombay relying upon the case of Tata Iron & Steel Company Vs. State of Bihar [AIR 1958, SC 452] held that for levying tax, it was not necessary that the sale should take place within the territorial limits of the State. The tax could be levied if all the ingredients of sale like the agreement to sale, the passing of title, delivery of goods have a territorial connection.

Citation :
Raj Shipping Vs. State of Maharashtra

Raj Shipping Vs. State of Maharashtra [2015 (62) taxmann.com 309 (Bombay)]

In the instant case, Raj Shipping (“the Petitioner”) was engaged in "Bunker Supplies" which mainly consisted of supply of High Speed Diesel Oil (“HSD”) to various incoming and outgoing vessels within or beyond the port limits of Mumbai port. The Petitioner was not paying Sales tax on supply of HSD to ships or vessels located beyond 1.5 nautical miles in high seas as sale was in territorial waters and accordingly, Maharashtra Value Added Tax Act (“MVAT Act”) was not applicable. The Department has alleged that Sales tax was leviable on the supply of HSD as MVAT Act was applicable.

The Hon’ble High Court of Bombay relying upon the case of Tata Iron & Steel Company Vs. State of Bihar [AIR 1958, SC 452] held that for levying tax, it was not necessary that the sale should take place within the territorial limits of the State. The tax could be levied if all the ingredients of sale like the agreement to sale, the passing of title, delivery of goods have a territorial connection. In the instant case the goods were manufactured or refined within the State and the Petitioner was situated at Mumbai, thus, it means that place of business of the Petitioner was in Mumbai. Also, HSD were supplied to the Petitioner at Mumbai from where it was carried in furtherance of contract through vessels. Therefore, there was sufficient territorial nexus for applicability of MVAT Act. Hence, HSD were transported within the State of Maharashtra and, thus, MVAT Act was applicable.

 

Bimal Jain
on 07 December 2015
Published in VAT
Views : 2133




 







Trending Tags
custom
epf
taxpayers
epfo
itc
pm cares fund
llp
itr
gstr 3b
companies act 2013
gstr 9
icai
audit
newgstreturn
ca students
Excise
dvat
tin nsdl
gst
icsi
Union Budget
career
exams
aatmanirbhar bharat
close
Financial Modeling

FM by Grant Thornton    |    x