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
Salary up to INR 12.75 Lakh? You May Still Have to Pay Tax in FY 2025-26 (AY 2026-27) Many salaried… Read More
Gurugram Issues Public Advisory Against Unauthorized PGs and Guest Houses The Office of the District Town Planner (Enforcement), Gurugram, has… Read More
FCRA Rules 2011 vs Foreign Contribution (Regulation) Amendment Rules 2026 The Ministry of Home Affairs notified the Foreign Contribution (Regulation)… Read More
Action Plan for Non-Filing of Form 10-IC for AY 2020-21 and Addressing Tax Demand If your domestic company did not… Read More
All about Pre-Packaged Insolvency Resolution Process The Pre-Packaged Insolvency Resolution Process is a fast-track insolvency resolution mechanism under the IBC… Read More
Moratorium and Bankruptcy Application under Individual Insolvency Proceedings in IBC, 2016 IBC provides a structured framework for resolving the insolvency… Read More