Vat on Sugar in Punjab

-         Originally, Sr. No. 49 of Sch A declared “Sugar and Khandsari “tax free

-          Later by Notification dated 5-11-2007, following amendmends were made:

a)In Sch B (@4% increased to 5% and later increased to 5.5%), following entry was made: Sr. No. 152: Sugar imported from outside state of Punjab except levy sugar

b)      Notification dated 5-11-2007, at the same time replaced S.No. 49 of Schedule A with the words “Sugar manufactured in the state of Punjab, levy sugar and khandsari ”

-          However Punjab and Haryana High Court declared this amendmend

discriminatory and struck down entry 152 of Sch B vide its order dated 13-8-2008 in case of Nand Kishore & Company in 11 STM 124

      -     Later vide notification dated 24-07-2012, the entry 49 not replaced even after

High Court verdict and still containing the words “Sugar manufactured in the state

of Punjab, levy sugar and khandsari ” was omitted and new entry no. 169 was

inserted in Sch B “ Sugar and Khandsari” thus making it taxable.

-          Now again vide notification dated 3-9-2012, Entry no. 169 of Sch B has been omitted and in Sch A (containing tax free items)new entry no. 80 inserted as “ Sugar and Khandsari”

      -    Hence sugar is taxable during the period 25-07-2012 to 3-09-2012