The scheme of S. 43B is to allow deduction when the sum is actually paid. (i) The credit of Excise Duty earned under MODVAT scheme is not sum payable by the assessee by way of tax, duty, cess. It is merely the incident of Excise Duty that has shifted from the manufacturer to the purchaser and not the liability to the same. Consequently, the unutilised credit under MODVAT scheme does not qualify for deduction u/s 43B. (ii) The sales tax paid by the appellant was debited to a separate account titled ‘Sales Tax recoverable account’ and is liable for disallowance u/s 43B. ( CAN0.11923 of 2018, dt. 07.02.2020) (AY. 1999-2000)
Maruti Suzuki India India Ltd. v. CIT (2020) 421 ITR 510/ 114 taxmann.com 129 / 270 Taxman 75/186 DTR 353 / 313 CTR 113 (SC) www.itatonline.org Editorial: Order in Maruti Udyog Ltd v . CIT ( 2017) 88 taxmann.com 98 /(2018) 253 Taxman 60/ 406 ITR 562 /161 DTR 1/ 308 CTR 682(Delhi) (HC) is affirmed .
S. 43B : Certain deductions on actual payment – The credit of Excise Duty earned under MODVAT scheme is not sum payable by the assessee by way of tax, duty, cess – unutilised credit under MODVAT scheme does not qualify for deduction – Sales tax paid by the appellant was debited to a separate account titled ‘Sales Tax recoverable account’ and is liable for disallowance .[S. 145 ]