The respondents Nokia India pvt. Ltd sold cell phones along with battery charger\u00a0 in a single solo pack and charged VAT at 4% on\u00a0 the ground that cell phones\u00a0 were covered under schedule B at serial entry no. 60(6)(g). According to them, when the charger is sold along with the cellphone, it was supplied free of cost\u00a0\u00a0\u00a0 and therefore, the composite pack was covered by the aforesaid entry. The HSN code applicable is 8525.20.17. They relied upon Rule 3(b) of the General Rules for interpretation of the First Schedule of the Import Tariff under the Customs Tariff Act, 1975, which reads as under:<\/p>\n
\u201c3(b)\u00a0\u00a0 mixtures, composite goods consisting of\u00a0 different materials or\u00a0 made up\u00a0\u00a0\u00a0 of different components, and goods put up in sets for retail sale, which cannot be classified by reference to (a), shall be classified as if they consisted of the material of component which gives them their essential character, insofar as this criterion is applicable.\u201d<\/p>\n
The respondents claimed that the composite pack was essentially made for sale of cell phone and no separate price was collected for the charger.\u00a0 As per above rule\u00a0\u00a0 of interpretation, the composite pack should be covered by entry 60(6)(g) liable to tax @4%. The assessingofficer, appellate officer and Tribunal dismissed the claim\u00a0\u00a0\u00a0 of chargers as \u201caccessory\u201d and sought to levy tax @ 12.5%. However, Punjab & Haryana High Court allowed the claim of the respondents and held that chargers are \u201caccessories\u201d of cell phone.<\/p>\n
\u00a0<\/p>\n
\u00a0<\/p>\n
\u00a0<\/p>\n
The Court considered the dictionary meaning of the term \u201caccessory\u201d as\u00a0 \u201c(1) a person or thing that aids subordinately; an adjunct; appurtenance; accompaniment (2) aiding the principal design, or assisting subordinately the chief agent, as in the commission of a crime. (3) contributory; supplemental; additional: accessory nerves\u201d<\/em>.<\/p>\n It also relied on the case of Annapurna Carbon Industries Co. v. State of Andhra Pradesh, (1976) 2 SCC 273, <\/em><\/strong>wherein the Court, while examining the question whether \u201cArc\u00a0 Carbon\u201d is an accessory to cinema projectors or whether\u00a0\u00a0\u00a0\u00a0\u00a0 it comes under other cinematography equipment under Entry 4 of Schedule I to\u00a0\u00a0 the A.P. General Sales Tax Act, 1957, observed that an \u201caccessory\u201d is an object or device that is not essential in itself but that adds to the beauty, convenience or effectiveness of something else.<\/p>\n It considered the aforesaid rule 3(b) but found it inapplicable in the given case since charger cannot be held as an integral part of the mobile phone making it a composite good. Merely, making a composite package of cell phone charger will\u00a0 not make it composite goodfor the purpose of interpretation of the provisions.<\/p>\n \u00a0<\/p>\n Battery charger is not a part of the cell phone but is an accessory thereof. It is an independent product which can be separately sold even without selling the cell phone. (CA Nos 11486-11487 of 2914 arising SLP (C) Nos 30398-30399 of 2011<\/p>\n Editorial<\/strong>: Ratio is useful in drawing demarcating line between \u201caccessory\u201d and \u201cpart\/component\u201d as also in interpreting the scope of HSN code since classification under GST is based on HSN.<\/p>\n Under GST law, there is a new concept of \u2018composite\u2019 and \u2018mixed\u2019 supply. The case was decided in absence of such situation. The definition of the term \u2018composite supply\u2019 under section 2(30) make it clear that if two or more taxable supplies were naturally bundled and supplied together\u00a0 in the ordinary\u00a0 course of business, it would be a case of composite supply where mobile handset would be a principal supply.<\/p>\n \u201cJustice should become cheap and expeditious. Today it is the luxury of the rich and the joy of the gambler.\u201d<\/em><\/p>\n – Mahatma Gandhi<\/p>\n \u00a0<\/p>\n \u00a0<\/p>\n","protected":false},"excerpt":{"rendered":" Punjab Value Added Tax Act , 2005Held<\/h3>\n
\n
\n Entry 60 (6)(g) : Concessional rate of levy- Mobile battery charger-whether part of mobile phone or accessory thereof-Cell phones covered by HSN code 8525.20.17 – Entry 60(6)(g) of Schedule B under the Punjab & Haryana VAT Act covered said HSN and liable to VAT @ 4%-respondent sold cell phone and battery charger in a single solo pack and collected VAT @4% on the total pack-VAT @ 12.5% collected on separate sale of battery chargers \u2013Battery charger is an accessory of cell phone and not part thereof-concessional rate of tax not applicable. [ S. 26 , 32(1), 53 ] <\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[5],"tags":[],"class_list":["post-13138","post","type-post","status-publish","format-standard","hentry","category-gst-law"],"acf":[],"jetpack_featured_media_url":"","jetpack_shortlink":"https:\/\/wp.me\/p9S2Rw-3pU","jetpack-related-posts":[],"jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/posts\/13138","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/comments?post=13138"}],"version-history":[{"count":1,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/posts\/13138\/revisions"}],"predecessor-version":[{"id":13139,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/posts\/13138\/revisions\/13139"}],"wp:attachment":[{"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/media?parent=13138"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/categories?post=13138"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/tags?post=13138"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}