Kerala to scrap VAT on adapter and charger packed with mobiles
Confusion had arisen following a Supreme Court ruling that adapters and chargers are accessories, not a part of mobile phone
 "Kerala to scrap VAT on adapter and charger packed with mobiles")
In a major relief for the mobile handset industry in Kerala, the state government has decided not to levy 12.5 per cent VAT on adapters / chargers that are packed with mobile phones. The industry has welcomed the decision, calling it a bold move'.
Confusion arose following a judgment passed by the Supreme Court in the State of Punjab vs Nokia case, clarifying that the mobile adapter / charger is only an accessory, and not a part of the mobile phone.
Confusion arose following a judgment passed by the Supreme Court in the State of Punjab vs Nokia case, clarifying that the mobile adapter / charger is only an accessory, and not a part of the mobile phone.
"Subsequently the trade and industry in Kerala went through a hard time due to harassment from field formations, which had issued demand notices, at times with retrospective effect, for the period between the SC judgment and issuance of the Kerala Government notification that put an end to the agony," according to Indian Cellular Association (ICA).
ICA is the apex body of the mobile industry consisting of manufacturers, brand owners, application and solution providers, distributors, retailers and eminent consumers of mobile handsets
"We are sure that this bold move of the Kerala Government, which remains in perfect alignment with globally prevalent best practices, would be extremely beneficial to enhance ease of doing business for the industry and may further promote growth of trade and industry in the state in days to come", said Pankaj Mohindroo, National President of ICA.
Mohindroo further said based on the Customs (Accessory Conditions Rule, 1963) which specifically provides that the accessories packed with an article attract the same rate of duty as the main item when they are compulsorily supplied free. The Department of Revenue, Government of India has advised the State Governments to adopt the Customs Rule for VAT taxation vide on dated November 30, 2015 so that there is a uniform practice followed throughout the country.
States are yet to formally adopt these rules, but many of them are aligning their Accessories Rules with the Central Law. The lack of a uniform Rule is affecting the free movement of goods in the country.