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The Kindle will cost you a little more now. The Delhi High Court has ruled that the device is not just an electrical machine with translation or dictionary functions and is liable for import duty.
The e-reader, produced by Amazon Inc, will now attract a basic customs duty of 7.5 per cent.
The duty is on imports made from May 12, 2017. This means Amazon will also need to pay the duty arrears from May 11, 2017 till date.
The government, through a notification dated December 30, 2006, had exempted electrical machines with translation or dictionary functions from customs duty.
On the basis of this notification, the Authority for Advance Rulings (AAR) had earlier exempted Kindle from import duty.
The Tax Department had challenged the order in the high court.
Some relief
Granting partial relief to the US-based e-commerce giant, the court said it need not pay the basic customs duty for the period between May 15, 2015 (the date on which the ARR order favouring Amazon was passed) and May 11, 2017 (the date on which the writ petition was filed).
Amazon has the option of moving the Supreme Court against the verdict.
Amazon India did not respond to queries sent by BusinessLine .
Commenting on the decision, MS Mani, Partner at Deloitte India, said: “This decision reaffirms the importance of correct classification, which should consider all the factors, including the primary function of the product, main and incidental features, etc. It reiterates the fact that all exemption notifications should be strictly interpreted.”
A Division Bench of the Delhi High Court said the primary function of Kindle is to enable the user to read e-books. It is therefore an e-book reading device and not a translator, and is not procured or purchased to perform the dictionary function, it added.
No one purchases a Kindle because it is a translator or a dictionary; it is purchased exclusively to read, said the court.
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