Rate of tax — Entries in Schedule — Battery chargers supplied with cell phone — Attracts same rate of tax applicable to cell phone — Punjab Value Added Tax Act, 2005.

The Company sold cell phone in a composite package, without any extra charge for supply of battery charger, which is a part of cell phone. The entry 60(6)(g) of Schedule B to the Punjab VAT Act, 2005 covers parts of the products mentioned therein. The Assessing Authority levied tax @12.5% on differential amount for supply of battery charger and not at concessional rate applicable to cell phone. This view of Assessing Authority was upheld by the Tribunal also. The company filled appeal to the Punjab and Haryana High Court against the decision of the Tribunal.

Held:

(1) When a cell phone is sold in a composite package, without any extra charge for the battery charger, the battery charger is a part of cell phone. Mere fact that the battery charger was not affixed to the cell phone will not mean that it is a different item. The entry in question cannot be read as excluding the battery charger which is necessary for use of the cell phone.

(2) Compared to the value of the cell phone, value of the charger is insignificant. Cell phone cannot be used without charger. On these undisputed facts the charger cannot be excluded from the entry for concessional rate of tax which applies to cell phones and parts thereto. Accordingly the appeal was allowed.