Assessee-company, a State Government Undertaking, was engaged in wholesale and retail trade of beverages within State . Assessee was holding FL-1 licence with respect to retail trade of foreign liquor in sealed bottles, without privilege of consumption within premises .  It was also having FL-9 licence for wholesale of foreign liquor, which it was selling to FL-1, FL-3, FL-4, 4A, FL-11, FL-12 licence holders.  Assessee claimed  the said payment is not disallowable Assessing Officer held that gallonage fee, licence fee and shop rental (kist) levied with respect to said FL-9 licence being an exclusive levy imposed on assessee was to be disallowed under section 40(a)(iib)  Order of the Assessing Officer is affirmed by the Appellate Tribunal . On appeal the Court held that in wholesale trade in foreign liquor under FL-9 licence was an exclusive trade in State permitted to assessee,  therefore, levy of gallonage fee, licence fee and shop rental (kist) with respect to FL-9 licences granted to assessee would clearly fall within purview of section 40(a)(iib) and amount paid in this regard was liable to be disallowed . Court also held  that gallonage fee, licence fee, or shop rental (kist) with respect to FL-1 licence granted to assessee for retail business in foreign liquor was not exclusively levied upon assessee as it was also levied upon one other State Government undertaking therefore, disallowance made in respect of gallonage fee, licence fee or shop rental (kist) paid with respect to FL-1 licence granted to assessee for retail trade could not be sustained . Court also held that surcharge on sales tax was introduced only as an increase in tax payable. Accordingly  a ‘tax’ cannot be equated with ‘fee or charge’  therefore, surcharge on sales tax or turnover tax paid by assessee-company was not a ‘fee or charge’ coming within sweep of section 40(a)(iib), thus, same could not be disallowed . (AY. 2014-15  2015-16)