{"id":322,"date":"2015-07-24T10:21:20","date_gmt":"2015-07-24T04:51:20","guid":{"rendered":"http:\/\/carajput.com\/blog\/?p=322"},"modified":"2021-08-16T15:47:45","modified_gmt":"2021-08-16T10:17:45","slug":"whether-importing-decorative-goods-predominantly-made-by-handis-classified-as-handicrafts-delhi-vat","status":"publish","type":"post","link":"https:\/\/carajput.com\/blog\/whether-importing-decorative-goods-predominantly-made-by-handis-classified-as-handicrafts-delhi-vat\/","title":{"rendered":"UPDATE ON DELHI VAT"},"content":{"rendered":"

Whether importing decorative goods predominantly made by handis classified as Handicrafts\u2013 Delhi VAT<\/strong><\/span><\/h2>\n

\"27\"<\/a>Recently in the case of\u00a0AME De Verre (P.) Ltd. V Commissioner Trade and Taxes<\/span>\u00a0<\/strong>(2015) 57<\/em>\u00a0<\/em>taxmann.com<\/a>\u00a0<\/em>1<\/em>47 (Delhi)<\/em>\u00a0\u00a0it has been held by the Delhi High Court that decorative items imported from Italy, which were predominantly made by hand, are classified as \u201cHandicrafts\u201d under entry no. 128 of Third Schedule of VAT Act and thus chargeable to tax @ 4%.<\/p>\n

In the said case, the assessee was engaged in sale of decorative items of glass under the brand name of \u2018Badli\u2019 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 \u2018Handicrafts\u2019 and consequently paid tax at the rate of 4%.<\/p>\n

However, the Commissioner rejected the assessee\u2019s 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.<\/p>\n

The assessee further appealed to the Delhi High Court where it was observed that the said items qualify as \u2018Handicrafts\u2019 as they fulfill the following characteristics-<\/p>\n

    \n
  1. It must be predominantly made by hand. It does not matter if some machinery is also used in the process.<\/li>\n
  2. Items must be graced with visual appeal in the nature of ornamentation or in work or some similar work lending it an element of artistic improvement. Such ornamentation must be of a substantial nature and not a pretence.<\/li>\n<\/ol>\n

    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 \u2018Handicrafts\u2019 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 \u2018Handicrafts\u2019 and consequently attract VAT at 4%.<\/p>\n

    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\u00a0endeavors. For query or help, contact:singh@carajput.com<\/a>\u00a0or call at 9555555480<\/p>\n","protected":false},"excerpt":{"rendered":"

    Whether importing decorative goods predominantly made by handis classified as Handicrafts\u2013 Delhi VAT Recently in the case of\u00a0AME De Verre (P.) Ltd. V Commissioner Trade and Taxes\u00a0(2015) 57\u00a0taxmann.com\u00a0147 (Delhi)\u00a0\u00a0it has been held by the Delhi High Court that decorative items imported from Italy, which were predominantly made by hand, are classified as \u201cHandicrafts\u201d under entry …<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[172,4],"tags":[2888,2886,2887,2885],"class_list":["post-322","post","type-post","status-publish","format-standard","hentry","category-gst","category-indirect-tax","tag-commissioner-trade-and-taxes-2015-57","tag-handicrafts","tag-taxable-at-the-rate-of-12-5-under-section-41e","tag-third-schedule-of-vat-act"],"aioseo_notices":[],"aioseo_head":"\n\t\t\n\t\n\t\n\t\n\t\n\t\n\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t