Interesting case : Putting various ingredients in ‘Paan’ leaf amounts to manufacture under Maharashtra VAT

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Interesting case : Putting various ingredients in ‘Paan’ leaf amounts to manufacture under Maharashtra VAT

Shokeen Pan Shop, In re – [2019] 106 taxmann.com 133 (AAR – MAHARASHTRA)

The Applicant is selling pan, pan masala, cigarettes from his shop.

The Applicant has sought advance ruling to determine whether the activity of putting various ingredients together on a ‘Paan’ leaf for customer amounts to manufacture as per Maharashtra VAT?

  The Authority for Advance Ruling, Maharashtra observed that the paan leaf purchased by the applicant and the paan being sold by him are not the same and are two different commercial products.

After purchasing the paan leaf, different processes are carried out, such as stalk and tip of the leaves are cut off and then those are kept in water to make them soft.

As per the choice of the customer, various ingredients are added to the paan leaf to make it appetizing. Therefore, Paan leaves initially purchased in raw form become different commodities after ingredients are added to those.

       The Authority for Advance Ruling, Maharashtra held that the Paan leaves sold by the applicant after addition of various ingredients cannot be termed as resale but amounts to manufacture under Maharashtra VAT.

 

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