Financial Daily from THE HINDU group of publications
Thursday, May 19, 2005
Financial Daily from THE HINDU group of publications Thursday, May 19, 2005 |
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Corporate
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Taxation Sales tax demand of Rs 4,962 cr on GAIL set aside Our Bureau
New Delhi , May 18 THE Gujarat Sales Tax Tribunal, Ahmedabad has set aside the sales tax demand of Rs 4,962 crore on GAIL (India) Ltd. The Tribunal has upheld the stand of GAIL that transportation of natural gas by it from Gujarat to other States amounts to `stock transfer' and not `inter-State sale'. This judgment will sizeably reduce the contingent liability of the company, a GAIL release said. The company had filed a protest against the demand of Rs 4,962 crore raised by the Gujarat Sales Tax Department. The central issue was about the transmission of natural gas from Gujarat to other States, which the Gujarat Sales Tax Department claimed was inter-State sale and assessed the tax provisionally and passed order under the Act concerned. GAIL carries gas from Gujarat to other States under its ownership and transfers the ownership at the custody transfer point and claims it as stock transfer. The dispute on the demand of sales tax by the Gujarat Sales Tax Department pertained to the period between 1994-95 and 2000-01. GAIL contested the case before the Supreme Court, which transferred the case to the State Tribunal on the grounds that the issue did not involve pure question of law. GAIL carries almost 85 per cent of the gas from Gujarat to various States under its ownership.
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