Subject : What will be the rate of tax payable on sale of inverter batteries? Whether the same are covered in Entry No. 41A sub clause (7) and taxable @ 4% or the same are classified as general item and taxable @12.5%?"

BEFORE Ms. ARCHNA ARORA, COMMISSIONER, VAT : DELHI

M/s. Exide Industries Ltd.,

Exide House, 3E/9, Link Road,

Jhandewalan, New Delhi.

ORDER

Present for the Applicant : Sh. Sunder Sharma, CA

Present for the Department : Sh. J.K. Kaushal, DR.

The above named applicant has filed this application on 24.5.06 u/s 84 of the Delhi Value Added Tax Act, 2004 (hereinafter referred to as the "said Act") and the question put up before this Court for determination under the aforesaid provision of law are as under:-

What will be the rate of tax payable on sale of inverter batteries? Whether the same are covered in Entry No. 41A sub clause (7) and taxable @ 4% or the same are classified as general item and taxable @12.5%?"

2. The application for determination has been made in the prescribed format DVAT-42 and the requisite fee of Rs.500/- paid through Draft No.098296 dated 10.05.2006.

3. The applicant engaged in the business of manufacturing and sale of Inverter Batteries, which are exclusively designed and used for inverter as its parts.

4. Shri Sharma, who appeared on behalf of the applicant has reiterated the grounds of the application of determination. He has argued that the inverter batteries which the applicant manufactures are of a different range and are only usable in the invertors. In support of its contention he has furnished copies of the catalogues showing different types of batteries. He has further stated that vide Notification No.F-3(77)/Fin(T&E)2005-06/1434-1443 dated 14.03.2006 the uninterrupted Power Supplies (UPS), inverters and their parts were brought in Third Schedule under Entry No. 41A. As such it should be held taxable @ 4%.

5. The DR on the other hand, argued that applicant is engaged in the business of manufacturing batteries which are a source of electricity and may be used in various types of appliances such as inverters, UPS, Telecommunication equipments and in vehicles etc.. The Batteries having its own function are being used as well as sold separately thus it is not a part of inverter. The Commissioner, Sales Tax vide notification No. F9(1)/94-PPR-PF-1/889-1174 dated 7.5.97 has already held that batteries are electrical items and as such when sold separately shall attract sales tax @ tax on the electrical goods. Further the batteries do not find any place in any of the Schedules of the said Act. It is therefore, general unclassified item.

6. I have carefully perused in detail the application filed u/s 84 of the Act, written submission and also heard the counsel of the applicant and the DR, I have also gone through the material placed on record, aforesaid notification and the Schedules of the DVAT Act, 2004. Having considered all these facts, this Court is of the opinion that the item which is the subject matter of the present application is not covered by the aforesaid notification nor does it find any place in the schedules of the Act thus is a general unspecified item that would attract tax at the rate of 12.5%. It is held and determined accordingly.

( Archna Arora )

Commissioner, VAT, Delhi