- Gujarat High Court's refusal to keep chewing gum in the category of sweets.
- The decision to charge 12.5 percent VAT instead of 4 percent remains.
- The direct impact of this judgment on the relevant tax case in Gujarat; It does not mean that taxes have increased across the country.
From children to adults, many people like to chew chewing gum. However, the Gujarat High Court has ruled that chewing gum cannot be classified as sweets or sweet foods. The court observed that after chewing the remaining part of the chewing gum is not swallowed but thrown away. Therefore, the court has upheld the decision to levy value added tax (VAT) at 12.5 percent instead of 4 percent.
What is the matter?
Cad Mac Chew Food is a Gujarat-based company that manufactures peppermint, sugar tablets and chewing gum. The taxation of this company was disputed for many years. In February 2007, Commercial Tax authorities inspected the company and verified sales and tax records.
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Will chewing gum be expensive in the country?
This decision of the High Court is related to a tax case in Gujarat. Therefore, it cannot be concluded that the tax on chewing gum will increase across the country. This decision will have a direct impact on the relevant taxation in Gujarat.
Role of the company
The company challenged the decision of the VAT department. The tribunal then ruled in favor of the company and included chewing gum in the category of sweets and sweet foods. Accordingly, it was decided to apply 4 percent tax on it. However, the Gujarat government challenged this decision in the High Court.
What did the court say?
A two-judge bench of the Gujarat High Court clarified during the hearing that a substance cannot be considered food merely because it tastes sweet. The court observed that chewing gum tastes sweet but is not swallowed. Therefore, the court said that it is not appropriate to include it in the tax category of sweets or sweet foods. The court overruled the earlier decision of the VAT Tribunal and accepted the state government's stand.
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Will chewing gum be expensive in the country?
This decision of the High Court is related to a tax case in Gujarat. Therefore, it cannot be concluded that the tax on chewing gum will increase across the country. This decision will have a direct impact on the relevant taxation in Gujarat.
(Disclaimer: This is an automated news feed of Navarashtra newspaper. It is not edited by navarashtra.com staff.