Home GST Madras HC Criticizes the Way AO to Classify Harpic and Lizol Under 28% GST Rate

Madras HC Criticizes the Way AO to Classify Harpic and Lizol Under 28% GST Rate

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Madras HC Criticizes the Way AO to Classify Harpic and Lizol Under 28% GST Rate
Madras HC's Order for Reckitt Benckiser (India) Limited

The Madras Excessive Court docket dominated that Ao’s classification of Harpic and Lizol underneath the 28% GST slab price is with out consideration.

The bench of Justice Mohammed Shaffiq famous that when complaints are raised, an obligation is solid on the assessing authority to use its thoughts to the objections and take care of every one in all them. Negligence to take action shall vitiate the evaluation order based mostly on non-application of thoughts.

The applicant engaged within the enterprise of producing and supplying flooring cleaners, bathroom cleaners, medicated cleaning soap, dishwashing, handwashing, and many others. The applicant had affected gross sales of Harpic and Lizol by imposing tax at 18% GST on the availability (sale) of products and remitting it.

The respondent division points a discover proposing to deal with the sale of Harpic and Lizol at 28% GST by treating it as falling underneath Merchandise No. 29 to 31 of the Fourth Schedule to the Items and Service Tax Act rejecting the classification underneath Merchandise 87 of the Third Schedule to the Items and Service Tax Act.

The proposal had been obtained from the State Tax Enforcement the evaluation order mentioned that it was not marked or disclosed within the present trigger discover. The evaluation order locations dependence on the elements utilized in Harpic and Lizol to desert the classification that the petitioner made whereas confirming its proposal to deal with Harpic and Lizol as dropping underneath Entry 31 of the Fourth Schedule liable to tax at 14% underneath TNGST.

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The applicant, the State of Tamil Nadu had accepted the class of Harpic and Lizol as disinfectants underneath the TNVAT Act by treating the gross sales of Harpic and Lizol as falling underneath Entry 17(a) of Half B to the Fourth Schedule of the TNVAT Act for the interval 12.07.2011 to 29.05.2013 and underneath Entry 22 of Half C to the First Schedule to the TNVAT Act, from 29.05.2013 till GST was launched wef 01.01.2017.

The division had requested for the class of Lizol as a disinfectant based mostly on an advance ruling. Earlier than the Madurai Bench of the Madras Excessive Court docket, the advance ruling was put to the problem, and it was put aside, conserving Harpic and Lizol accountable for being categorized simply as disinfectants.

The Madras Excessive Court docket remarked that evaluation orders confirmed for the primary time that the whole proposal had been made based mostly on the proposal obtained from the enforcement wing authorities. As it’s only within the order of evaluation that it was revealed for the primary time that the proposal had been obtained from the enforcement wing authorities, the objections of the applicant had been disabled.

The court docket talked about that the evaluation order suffers from the vice of non-application of thoughts to the objection and in addition non-disclosure of the purpose that the enforcement wing furnishes the proposal, therefore perverting the evaluation order.

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