Dear Learned Members,
I've a question regarding relating to Karnataka Entry Tax Act.
Question (1): What constitutes 'value of goods' under Karnataka Entry Tax Act.
Under Section 2(8-a) of Karnataka Tax on Entry of Goods Act, 1979, the term 'value of goods' has been defined as "Value of the goods shall mean the purchase value of such goods, that is to say, the purchase price at which a dealer has purchased the goods inclusive of charges borne by him as cost of transportation, packing, forwarding and handling charges, commission, insurance, taxes, duties and the like or if such goods have not been purchased by him, the prevailing market price of such goods in the local area"
From the reading of the above definition of value of goods, it is cleare that it is an inclusive definition and it includes the following as a part of value of goods:
Purchase Value, Transportation cost, Packing Charges, Forwarding Charges, Handling Charges, Commission Charges, Insurance Charges, Taxes, Duties and the like...
Question (2): Under ".... the like" what expenses are included?
There is no exhaustive list and it depends on facts and circumstances of a particular case. Could we include the following expenses under value of goods under Karnataka Entry Tax Act
1. Basic Unit Price
2. Basic Customs Duty
3. Clearing Charges
4. Commissioning Charges
5. Consumables (imported along with machine - first time)
6. Design Cost
7. Drawings Cost
8. Engineering Fee
9. Erection Cost
10. Forwarding Charges
11. Freight
12. Handling Charges
13. Initial Delivery Charges
14. Installation Fee
15. Insurance
16. Labour Cost
17. Misc - Charges
18. Packing Charge
19. Registration Charge
20. Road Tax
21. Shipping Charges
22. Site Preparation Costs
23. Spares/Cables/Accessories (imported along with machine)
24. Transportation Charges including loading & unloading
25. Any other costs incurred in bringing the asset to it's location for intended use
26. Borrowing Cost (Interest expense) – This item is as per accounting treatment and to be in compliance with AS 16. However, from an entry tax perspective, should we include this as well while arriving at value of goods for entry tax computation?
Thank you for your attention to this question and look forward hear your comments/opinions.
Regards,
S Kulkarni
CAclubindia
