In a recent ruling, the Madras High Court held that Bingo chips is classifiable as ‘Processed Vegetable’ for which only 4 per cent tax can be levied under the Tamil Nadu Value Added Tax (TNVAT) Act.
In the instant case, the petitioners M/s Chemadhi Traders is a dealer of Bingo chips. The department took a view that the above products are taxable at higher rate under the residuary entry.
Entry No.107 in Part B of the first Schedule specifically specifies that processed fruit and vegetables including fruit jam, jelly, etc., other than those specified in the fourth Schedule, are liable to be taxed at 4% and for the other goods under Entry 69, the tax payable would be at the rate of 12.5%.
The Court noted that Potato chips are, admittedly, processed vegetables.
The Court further noticed the judicial decisions wherein it was the Courts held that potato chips sold under the same brand “Lays” and “Uncle Chips” are held to be classifiable as processed vegetables and not to come under a residuary entry.
Alowing the petition, Justice M Govindaraj held that the chips will fall under the category ‘processed vegetable’ and accordingly, the same is liable to be taxable under Entry 107 in Part B of the first Schedule to the TNVAT Act. Therefore, it cannot be taxed under Entry 69 at the rate of 12.5%.
Subscribe Taxscan Premium to view the Judgment
