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SC on Levy of Sales Tax on Supply of Food SC on Levy of Sales Tax on Supply of Food

Bronze medal Reporter Adv Vrinda Posted 6 Oct 2019 Read More News and Blogs
SC on Levy of Sales Tax on Supply of Food

The supreme court had recently stated that there will be no levy tax on supply of food and beverages. The supreme court bench consists of Justices R F Nariman, Surya Kant, and Rama Subramanian. The court observed that" a tax on the supply of goods by any unincorporated association or body of persons to a member thereof for cash, deferred payment or other valuable consideration;a tax on the supply, by way of or as part of any service or in any other manner whatsoever, of goods, being food or any other article for human consumption or any drink (whether or not intoxicating), where such supply or service, is for cash, deferred payment or other valuable consideration, and such transfer,delivery or supply of any goods shall be deemed to be a sale of those goods by the person making the transfer, delivery or supply and a purchase of those goods by the person to whom such transfer, delivery or supply is made;

It is clear that the reason for sub-clause, as has been stated in the Statement of Objects and Reasons, is the doing away with of two judgments of this Court, namely, State of Punjab v. Associated Hotels of India Limited AIR 1972 SC 1131 and Northern India Caterers (India) Ltd. (supra). The 46th Amendment Act, therefore, when reading as a whole, would make it clear that Article 366(29-A)refers only to an undoing of the aforesaid two judgments, the subject matter being the taxability of food or drink served in hotels and restaurants. This being the case, it is obvious that the taxability of food or drink served in members' clubs is not the subject matter of sub-clause.This is one of the top most legal judgments in India.

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