In the said case, the assessee was engaged in sale of decorative items of glass under the brand name of ‘Badli’ which were manufactured primarily using designs given by craftsmen and statedly involved crystal playing, engraving, polishing, assembling, chiseling and then final product was made, in addition the same was subject to hand polishing, dismantling, pregilding and then finally assembled. Hence, the assessee classified the same as ‘Handicrafts’ and consequently paid tax at the rate of 4%.
However, the Commissioner rejected the assessee’s claim and held that the said items should be categorized as unclassified goods and taxable at the rate of 12.5% under section 4(1)(e). On appeal by the Assessee, the Tribunal also upheld the same.
The assessee further appealed to the Delhi High Court where it was observed that the said items qualify as ‘Handicrafts’ as they fulfill the following characteristics-
Further, it was noticed that there is nothing contained in VAT Act or rules, or in any other instructions, notification, etc. to require that a commodity in order to be accepted as ‘Handicrafts’ must be one indigenously made, or to put it conversely, not be one imported into India. Hence, the Delhi High Court held that goods sold by the assessee fall in category of ‘Handicrafts’ and consequently attract VAT at 4%.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances; Hope the information will assist you in your Professional endeavors. For query or help, contact:singh@carajput.com or call at 9555555480
Loan Against Shares Interest Rates Explained: What Investors Should Know In India’s dynamic financial market, investors often look for flexible… Read More
Why and How to Avoid Useless Expenses This Diwali – A Nature Lover’s Perspective October 2025 Diwali, the festival of… Read More
How to manage repayments effectively on a personal loan of three lakhs Taking a Rs. 3 lakh personal loan can… Read More
Procedure of Member’s Voluntary Winding Up under the Companies Act, 1956 A Members’ Voluntary Winding Up is a mode of… Read More
Top 10 Financial Transactions That Can Trigger Income Tax Scrutiny : The Income Tax Department keeps a close watch on… Read More
Overview of the Internal Audit Iceberg Concept Apache Iceberg introduces a powerful feature called Integrated Audits, which allows organizations to… Read More