By C. B. Thakar, Advocate
G. G. Goyal, Janak Vaghani, Chartered Accountants
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Sale in Course of Export-Purchase of Tags and Labels-Exporting After Attaching to Products Manufactured-Deemed Export-Exempt From Payment of Purchase Tax-Section 5(3) of The Central Sales Tax Act, 1956
Facts
As per the requirement of foreign buyers and in terms of the export orders, the company purchased tags and labels from printing presses and attached to each and every coir product exported giving product description in terms of buyer’s norms. The assessing authorities held that the purchase of tags and labels by the company were consumed in manufacturing of coir products as such liable to purchase tax u/s. 5A of the Kerala General Sales Tax Act, 1963, which was confirmed by the Tribunal. The company filed revision petition before the Kerala High Court against the levy of purchase tax by the assessing authorities.
Held
The High court, allowing the revision petition filed by the company, held that admittedly tags and labels were printed by the supplier printing press in terms of the company’s orders, which were in conformity with export orders. So much so, the commodity, even at the time of printing or manufacture, was earmarked for export, after purchase and they were attached to the products exported. Therefore the commodity purchased was for export by attachment to the coir products without any change and exempt from payment of purchase tax being deemed export u/s. 5(3) of the CST Act.
