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
New cheque clearing process in India starting from October 4, 2025 Existing System (Until Oct 3, 2025) : Clearing Method:… Read More
Overview on Tax Treatment on Gratuity in India What is Gratuity? Gratuity is a lump sum paid by an employer… Read More
Taxation Comparison: Gold Coin vs Gold Jewellery Tax Aspect Gold Coin Gold Jewellery ITR Reporting Treated as a capital asset.… Read More
Crypto Taxation & ITR Reporting Guide Tax on Profits from Crypto (Virtual Digital Assets)- Taxation U/s 115BBH Applicability on Virtual… Read More
Savings Account – Rules for Transactions to Avoid Income Tax Scrutiny The Income Tax Department monitors high-value transactions through banks’… Read More
Quick Guide on GST Marginal Scheme What is GST Marginal Scheme Meaning : The GST Margin Scheme is applicable primarily… Read More