Entry tax in karnataka state
Ramasamy
(Querist) 03 November 2011
This query is : Resolved
Dear Sir,
My Friend wants to buy a car in TamilNadu and do registration in B'lore.
In Karnataka State, there was an Entry Tax for Cars bought from other states
This Entry Tax has been removed by Supreme Court ruling recently.
My Friend want to confirm whether this is in effect now (no Entry Tax in Karnataka State).
Can you pls. check and confirm it?
Selvam Perumal
(Expert) 07 November 2011
1. Karnataka State passed an Act namely Karnataka Tax on Entry of Goods Act, 1979 [http://www.google.co.in/url?sa=t&rct=j&q=karnataka%20tax%20on%20entry%20of%20goods%20into%20a%20local%20area%20for%20consumption%2C%20use%20or%20sale%20therein%20act%2C%201980&source=web&cd=1&ved=0CBwQFjAA&url=http%3A%2F%2Fdpal.kar.nic.in%2F.%255C27%2520of%25201979%2520(E).pdf&ei=V7u2TvaSN8virAez15X1Aw&usg=AFQjCNHF876iXug23E9ZkjD5x8yGuo8MWQ&sig2=xC79jglZjkHqO7LZir1V7g] in which Section 4B provides for levy of tax on causing entry by an importer, of any motor vehicle in to a local area for use or sale therein from outside the State.
2. Then batch of Writ Petitions were filed before the Karnataka High Court challenging the above provisions of Section 4B and as such on 26th July, 1999 the Karnataka High Court in Syndicate Bank Vs. State of Karnataka and others (which is reported in 2000 (119) STC 155, Kar) [http://www.indiankanoon.org/doc/1480416/] agreed those objections and declared Section 4B as “illegal” in its Para Nos.6 to 8 as follows:
“……There could be a provision by which no discrimination between imported goods and locally manufactured goods is given and the amount of entry tax is given adjustment in the total liability of sales tax or the amount of sales tax already paid could be given adjustment under the provisions of the Entry Tax Act.
7. Provisions of Section 4-B has made liable only the importer of motor vehicles for registration and tax. Importer has been defined under Section 4-A(1)(c) as the person who brings a motor vehicle into a local area from any place outside the State for use, or sale therein and who owns the vehicle at the time of entry into the local area.
8. It cannot be denied nor can be presumed that the motor vehicles are not produced in the State of Karnataka. If such locally manufactured motor vehicles are moved from one local area to another they are not liable to entry tax and it is only the importer who has been subjected to tax. The provisions of Section 4-B of the Karnataka Tax on Entry of Goods Act, 1979 are directly hit by Articles 301 and 304(a) of the Constitution of India and are declared ultra vires the Constitution”.
3. Against the Judgment the Karnataka State Govt. preferred a Writ Appeal before Division Bench of Karnataka High Court which was dismissed by the Karnataka High Court on 24th November, 1999.
4. Then the Karnataka State Govt. preferred SLP namely Special Leave Petition before Supreme Court which is pending till date for decision.
5. In the meanwhile the Karnataka Govt. has gone through the Maharashtra State Govt. Act on the same subject which is called as “Maharashtra Tax on Entry of Motor Vehicles in the Local Areas Act, 1987”. The said Maharashtra Act was also already brought before Supreme Court but the Supreme Court dismissed their challengers and upheld the Act in its Judgment dated 25th November, 1994 in Shakthikumar M. Vs. State of Maharashtra (which is reported in 1995 SCC (1) 351) [http://www.indiankanoon.org/doc/1134634/].
6. So the Karnataka State Govt. had perused the Maharashtra Act and that of the Supreme Court decisions and decided to amend the Karnataka State Act to make as similar to Maharashtra State Act vide Bill No. 21 of 2000.
7. As such as on date according to provisions 3 and 4B of Karnataka Tax on Entry of Goods Act, 1979 the Vehicles Owner has to pay “Entry Tax” for using the Vehicles in Karnataka State which has been purchased from outside Karnataka State.
Selvam Perumal
(Expert) 07 November 2011
1. Karnataka State passed an Act namely Karnataka Tax on Entry of Goods Act, 1979 [http://www.google.co.in/url?sa=t&rct=j&q=karnataka%20tax%20on%20entry%20of%20goods%20into%20a%20local%20area%20for%20consumption%2C%20use%20or%20sale%20therein%20act%2C%201980&source=web&cd=1&ved=0CBwQFjAA&url=http%3A%2F%2Fdpal.kar.nic.in%2F.%255C27%2520of%25201979%2520(E).pdf&ei=V7u2TvaSN8virAez15X1Aw&usg=AFQjCNHF876iXug23E9ZkjD5x8yGuo8MWQ&sig2=xC79jglZjkHqO7LZir1V7g] in which Section 4B provides for levy of tax on causing entry by an importer, of any motor vehicle in to a local area for use or sale therein from outside the State.
2. Then batch of Writ Petitions were filed before the Karnataka High Court challenging the above provisions of Section 4B and as such on 26th July, 1999 the Karnataka High Court in Syndicate Bank Vs. State of Karnataka and others (which is reported in 2000 (119) STC 155, Kar) [http://www.indiankanoon.org/doc/1480416/] agreed those objections and declared Section 4B as “illegal” in its Para Nos.6 to 8 as follows:
“……There could be a provision by which no discrimination between imported goods and locally manufactured goods is given and the amount of entry tax is given adjustment in the total liability of sales tax or the amount of sales tax already paid could be given adjustment under the provisions of the Entry Tax Act.
7. Provisions of Section 4-B has made liable only the importer of motor vehicles for registration and tax. Importer has been defined under Section 4-A(1)(c) as the person who brings a motor vehicle into a local area from any place outside the State for use, or sale therein and who owns the vehicle at the time of entry into the local area.
8. It cannot be denied nor can be presumed that the motor vehicles are not produced in the State of Karnataka. If such locally manufactured motor vehicles are moved from one local area to another they are not liable to entry tax and it is only the importer who has been subjected to tax. The provisions of Section 4-B of the Karnataka Tax on Entry of Goods Act, 1979 are directly hit by Articles 301 and 304(a) of the Constitution of India and are declared ultra vires the Constitution”.
3. Against the Judgment the Karnataka State Govt. preferred a Writ Appeal before Division Bench of Karnataka High Court which was dismissed by the Karnataka High Court on 24th November, 1999.
4. Then the Karnataka State Govt. preferred SLP namely Special Leave Petition before Supreme Court which is pending till date for decision.
5. In the meanwhile the Karnataka Govt. has gone through the Maharashtra State Govt. Act on the same subject which is called as “Maharashtra Tax on Entry of Motor Vehicles in the Local Areas Act, 1987”. The said Maharashtra Act was also already brought before Supreme Court but the Supreme Court dismissed their challengers and upheld the Act in its Judgment dated 25th November, 1994 in Shakthikumar M. Vs. State of Maharashtra (which is reported in 1995 SCC (1) 351) [http://www.indiankanoon.org/doc/1134634/].
6. So the Karnataka State Govt. had perused the Maharashtra Act and that of the Supreme Court decisions and decided to amend the Karnataka State Act to make as similar to Maharashtra State Act vide Bill No. 21 of 2000.
7. As such as on date according to provisions 3 and 4B of Karnataka Tax on Entry of Goods Act, 1979 the Vehicles Owner has to pay “Entry Tax” for using the Vehicles in Karnataka State which has been purchased from outside Karnataka State.
Selvam Perumal
(Expert) 07 November 2011
1. Karnataka State passed an Act namely Karnataka Tax on Entry of Goods Act, 1979 [http://www.google.co.in/url?sa=t&rct=j&q=karnataka%20tax%20on%20entry%20of%20goods%20into%20a%20local%20area%20for%20consumption%2C%20use%20or%20sale%20therein%20act%2C%201980&source=web&cd=1&ved=0CBwQFjAA&url=http%3A%2F%2Fdpal.kar.nic.in%2F.%255C27%2520of%25201979%2520(E).pdf&ei=V7u2TvaSN8virAez15X1Aw&usg=AFQjCNHF876iXug23E9ZkjD5x8yGuo8MWQ&sig2=xC79jglZjkHqO7LZir1V7g] in which Section 4B provides for levy of tax on causing entry by an importer, of any motor vehicle in to a local area for use or sale therein from outside the State.
2. Then batch of Writ Petitions were filed before the Karnataka High Court challenging the above provisions of Section 4B and as such on 26th July, 1999 the Karnataka High Court in Syndicate Bank Vs. State of Karnataka and others (which is reported in 2000 (119) STC 155, Kar) [http://www.indiankanoon.org/doc/1480416/] agreed those objections and declared Section 4B as “illegal” in its Para Nos.6 to 8 as follows:
“……There could be a provision by which no discrimination between imported goods and locally manufactured goods is given and the amount of entry tax is given adjustment in the total liability of sales tax or the amount of sales tax already paid could be given adjustment under the provisions of the Entry Tax Act.
7. Provisions of Section 4-B has made liable only the importer of motor vehicles for registration and tax. Importer has been defined under Section 4-A(1)(c) as the person who brings a motor vehicle into a local area from any place outside the State for use, or sale therein and who owns the vehicle at the time of entry into the local area.
8. It cannot be denied nor can be presumed that the motor vehicles are not produced in the State of Karnataka. If such locally manufactured motor vehicles are moved from one local area to another they are not liable to entry tax and it is only the importer who has been subjected to tax. The provisions of Section 4-B of the Karnataka Tax on Entry of Goods Act, 1979 are directly hit by Articles 301 and 304(a) of the Constitution of India and are declared ultra vires the Constitution”.
3. Against the Judgment the Karnataka State Govt. preferred a Writ Appeal before Division Bench of Karnataka High Court which was dismissed by the Karnataka High Court on 24th November, 1999.
4. Then the Karnataka State Govt. preferred SLP namely Special Leave Petition before Supreme Court which is pending till date for decision.
5. In the meanwhile the Karnataka Govt. has gone through the Maharashtra State Govt. Act on the same subject which is called as “Maharashtra Tax on Entry of Motor Vehicles in the Local Areas Act, 1987”. The said Maharashtra Act was also already brought before Supreme Court but the Supreme Court dismissed their challengers and upheld the Act in its Judgment dated 25th November, 1994 in Shakthikumar M. Vs. State of Maharashtra (which is reported in 1995 SCC (1) 351) [http://www.indiankanoon.org/doc/1134634/].
6. So the Karnataka State Govt. had perused the Maharashtra Act and that of the Supreme Court decisions and decided to amend the Karnataka State Act to make as similar to Maharashtra State Act vide Bill No. 21 of 2000.
7. As such as on date according to provisions 3 and 4B of Karnataka Tax on Entry of Goods Act, 1979 the Vehicles Owner has to pay “Entry Tax” for using the Vehicles in Karnataka State which has been purchased from outside Karnataka State.
