PANAJI
The practice of taxing cash and other incentives given by manufacturers and distributors has upset liquor traders in Goa who have now petitioned the Commissioner of Commercial taxes through the Goa Chamber of Commerce & Industry (GCCI).
GCCI said it has asked the department to address taxation on discounts or rebates granted to liquor dealers under the Goa VAT regime.
Rohan Bhandare, who heads the GCCI's Taxation Committee has said in his letter to the Commissioner that liquor traders avail input credit on taxes paid on purchases which are reversed by the commercial taxes department on the premise that the incentives/discounts they get from manufacturers and distributors are taxable.
In many cases, the department has also raised demand notes for interest payable on this tax on incentives, Bhandare said in his letter.
"The taxes charged against their tax invoices have been duly paid to the government treasury without any adjustment towards discounts granted to the liquor dealers and as such the input tax credit should be fully admissible to them without any reversals," Bhandare said in the letter.
"Taxing of discounts in the hands of the liquor dealers is now a
double taxation for those who have already paid taxes at the time of purchase of goods," he said, adding that there are many case laws in favour of the liquor dealers.
He cited the example of Commissioner of Trade Taxes, Delhi v/s Challenger Computer Ltd [2017] 77 taxmann.com 199 (SC) case law and another matter in the Kerala High Court in which the decision was in favor of the assesses in similar matters - Priya Agencies v/s Commercial Tax Officer(A.A)(2008) 14 VST 293.
Since this money is not collected from the suppliers, the tax (as high as 22%)
and interest would have to be borne by the liquor dealers and would adversely affect their financial condition, he added.
GCCI Recommendation Bhandare said, since a significant number of liquor dealers have challenged their matters at the assessing officer, appellate and the High Court levels, it suggests "grave injustice" and the government should intervene.
