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Economic Times
19-07-2025
- Business
- Economic Times
USL liable to pay entry tax under Madhya Pradesh local area rule, holds Supreme Court
Synopsis The Supreme Court has ruled that United Spirits (USL) is responsible for paying entry tax in Madhya Pradesh on goods entering local areas for use, consumption, or sale. The court upheld the High Court's decision, stating that USL's sales to warehouses triggered the entry of goods, justifying the entry tax levy. IANS United Spirits Limited The Supreme Court on Monday held that United Spirits (USL) is liable to pay entry tax under the Madhya Pradesh Sthaniya Kshetra Me Mal Ke Pravesh Par Kar Adhiniyam 1976, which levied such tax on the entry of goods into a local area for use, consumption or the Madhya Pradesh High Court's decision which favoured the state, the bench of Justices J B Pardiwala and K V Vishwanathan said that '…it is clear that the appellants (USL) by the sale to the warehouse caused to be affected the entry of goods and the entry was occasioned on the account of the sale into the local area for consumption, use or sale therein.'It is also not disputed that USL is a dealer as defined under the Madhya Pradesh Value Added Tax Act, 2002, the SC said, adding that the company's only contention that the State warehouse was also a dealer 'makes no difference' since it cannot be disputed that the company certainly occasioned the entry of goods and the levy of entry tax on them, which could always be passed on, was perfectly justifiable in to the judges, we have no manner of doubt that there were two independent transactions, one between USL (manufacturers) and the State Warehouse and the other between the State warehouse and the retailers. 'Hence, it will be difficult to accept the contention of the State that the role of the State is only supervisory and the warehouses didn't purchase beer and IMFL from the manufacturer,' they the top court said that this does not resolve the issue in favour of USL as under Section 3 of the M.P. Entry Tax Act 1976, the incidence of taxation is on the entry in the course of business of a dealer of goods specified in Schedule II, into each local area for consumption, use or sale therein. The further requirement is that such tax was to be paid by every dealer liable to tax under the VAT Act who hasd effected entry of such goods. USL had contended that no direct sales could be made by the manufacturer to the retailers and there was "no privity of contract" between them and the retailers and it was the state government warehouse which sold the goods to the retailers. It is the warehouse which caused the movement of the goods into the local area, it the State government contended that it neither purchased nor sold liquor. The HC had correctly found that the warehouses neither purchased or sold liquor and that the department only supervised the sale made by the manufacturer to the retail contractors.
Time of India
14-07-2025
- Business
- Time of India
USL liable to pay entry tax under Madhya Pradesh local area rule, holds Supreme Court
The Supreme Court on Monday held that United Spirits ( USL ) is liable to pay entry tax under the Madhya Pradesh Sthaniya Kshetra Me Mal Ke Pravesh Par Kar Adhiniyam 1976, which levied such tax on the entry of goods into a local area for use, consumption or sale. Upholding the Madhya Pradesh High Court's decision which favoured the state, the bench of Justices J B Pardiwala and K V Vishwanathan said that '…it is clear that the appellants (USL) by the sale to the warehouse caused to be affected the entry of goods and the entry was occasioned on the account of the sale into the local area for consumption, use or sale therein.' It is also not disputed that USL is a dealer as defined under the Madhya Pradesh Value Added Tax Act, 2002, the SC said, adding that the company's only contention that the State warehouse was also a dealer 'makes no difference' since it cannot be disputed that the company certainly occasioned the entry of goods and the levy of entry tax on them, which could always be passed on, was perfectly justifiable in law. by Taboola by Taboola Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like Why These Barefoot Sandals are a Must for Summer 2025 Foot Secrets Learn More Undo According to the judges, we have no manner of doubt that there were two independent transactions, one between USL (manufacturers) and the State Warehouse and the other between the State warehouse and the retailers. 'Hence, it will be difficult to accept the contention of the State that the role of the State is only supervisory and the warehouses didn't purchase beer and IMFL from the manufacturer,' they said. However, the top court said that this does not resolve the issue in favour of USL as under Section 3 of the M.P. Entry Tax Act 1976, the incidence of taxation is on the entry in the course of business of a dealer of goods specified in Schedule II, into each local area for consumption, use or sale therein. The further requirement is that such tax was to be paid by every dealer liable to tax under the VAT Act who hasd effected entry of such goods. Live Events USL had contended that no direct sales could be made by the manufacturer to the retailers and there was "no privity of contract" between them and the retailers and it was the state government warehouse which sold the goods to the retailers. It is the warehouse which caused the movement of the goods into the local area, it argued. However, the State government contended that it neither purchased nor sold liquor. The HC had correctly found that the warehouses neither purchased or sold liquor and that the department only supervised the sale made by the manufacturer to the retail contractors.
Mail & Guardian
30-04-2025
- Business
- Mail & Guardian
Godongwana to table new budget on 21 May
Finance Minister Enoch Godongwana. (David Harrison/M&G) Finance Minister Enoch Godongwana said he would table a revised 2025 budget on 21 May to The political impasse prompted by his decision in March to hike VAT by one percentage point over two years, had flagged the pressing need for more consultative budget-making, Godongwana told a media briefing on Wednesday. 'Were any Godongwana said he believed that consultation with coalition partners should start in September, a month before the minister tables the medium-term budget policy statement and five months before the national budget in February. The 21 May budget will be the third he has prepared this year. He abandoned the first minutes before delivery in parliament in February and withdrew the second last week, a day after a high court hearing in which Democratic Alliance (DA) and the Economic Freedom Fighters (EFF) attacked the tax proposals and the manner in which they passed through parliament as unlawful. Godongwana conceded that he had failed to anticipate the push-back his budget proposals would encounter within a 10-party governing coalition and described what ensued as messy. 'We are dealing with uncharted terrain. As you are aware we used to have a budget with a dominant party, being the ANC, and if one was preparing the budget you could be sure that you would go to parliament and the ANC would pass the budget. 'Now we are in a coalition government.' The new reality had the practical implication of needing support for the fiscal framework from a number of political parties in the cabinet and in parliament and in the end it was not forthcoming. 'I was within my constitutional parametres to table a money bill, what then happened, because of the nature of the coalition politics we could not find consensus,' Godongwana said. While readily conceding the lack of political support for his second budget, he was firmly denying the DA's courtroom argument that the VAT Act was unconstitutional and that he had exceeded his powers but said he was not pointing a finger at the ANC's coalition partners. 'I am not going to put blame on anybody, but that process on its own, because all of us are new in this thing, was messy,' he added. 'We have all learnt from it because we might have gone into this not anticipating the kind of challenges we faced.' The EFF, which is outside the coalition but joined in the DA's court challenge, called on Godongwana to resign after he announced that he would return to the drawing board to revoke it. He said does not intend to do so, noting that he served at the pleasure of the president who understood the political complexity of his government. 'If that president falls, I fall, but for as long as he wants me to work, I am going to work.' Godongwana said the treasury would, over the next three weeks, prepare a budget he hoped would pass as a 'sellable document' but he was not going to undermine the legislature by saying it would pass muster. 'We are going to work hard to produce a document which will be sellable.' At what he said would be the final media briefing before 21 May, the minister was repeatedly asked whether the budget imbroglio and the reversal of the VAT hike would shake investor confidence. He said investors would make their assessment on the basis of the fiscal framework as set out in the new budget, not the 'We are not worried. The credibility issue is not going to be the reversal of VAT,' he said. 'The credibility issue is going to arise from the final product, the final budget that is adopted, whether that budget will reflect fiscal sustainability and fiscal prudence, that is where the credibility issue will arise.' He added that international ratings agencies and investors were accustomed to 'the chaos of coalition governments' in more advanced economies. 'For them, it is not something new.'
TimesLIVE
30-04-2025
- Business
- TimesLIVE
Third time lucky? Godongwana announces new date for 2025 budget
Finance minister Enoch Godongwana says he will table the third attempt for the 2025 budget on May 21 after months of discord over his VAT hike proposal. Speaking to reporters in Pretoria on Wednesday afternoon, the minister said he sent a formal request to National Assembly speaker Thoko Didiza to allow the budget to be tabled in mid-May. "The ministry remains committed to transparent communication throughout the process and will provide further updates as they become available. We owe it to the hardworking citizens of SA to be open and transparent about how tax money is spent. The budget that will be tabled on May 21 will aim to maintain the principles," he said. Godongwana has made two attempts to table the 2025 budget. In February he planned to propose two VAT hikes for 2025 and 2026, but resistance to the proposal from parties in the government of national unity (GNU) and parliament forced the minister to delay the budget and return in March. He tabled a March budget that allowed for two 0.5 basis point VAT increases. While the second version of the budget was tabled, the DA and the EFF challenged its passage by the standing committee on finance and the VAT Act at the Western Cape High Court as unconstitutional.
TimesLIVE
30-04-2025
- Business
- TimesLIVE
Third time lucky? Godongwana announces a third date for 2025 budget
Finance minister Enoch Godongwana says he will table the third attempt for the 2025 budget on May 21 after months of discord over his VAT hike proposal. Speaking to reporters in Pretoria on Wednesday afternoon, the minister said he sent a formal request to National Assembly Speaker Thoko Didiza to allow the budget to be tabled in mid-May. "The ministry remains committed to transparent communication throughout the process and will provide further updates as they become available. We owe it to the hardworking citizens of SA to be open and transparent about how tax money is spent. The budget that will be tabled on May 21 will aim to maintain the principles." The minister has made two attempts to table the 2025 budget. In February he planned to propose two VAT hikes for 2025 and 2026, but resistance to the proposal from parties in the government of national unity (GNU) and parliament forced the minister to delay the budget and return in March. The minister tabled a March budget that allowed for two 0.5 basis point VAT increases. While the second version of the budget was tabled, the DA and the EFF challenged its passage by the standing committee on finance and the VAT Act at the Western Cape high court as unconstitutional. Godongwana said the revised budget will adhere to all established technical processes and consultations as set out in the Money Bills and Related Matters Act, consultations with the Financial and Fiscal Commission and all political parties within the GNU. "Until the new budget is passed, government services will continue to be funded under the Public Finance Management Act. This allows spending of up to 45% of last year's budget during the first four months, and up to 10% for each month after that." He said while National Treasury waits for the 2025 Division of Revenue Act to be passed, funding for provinces and municipalities will continue under the 2024 act, allowing transfers of up to 45% of their allocated funds. During the briefing, Godongwana was asked if he would resign or if he expected President Cyril Ramaphosa would remove him after the chaotic wrangling around the budget. "That decision does not lie with me. It lies with the president. But I am mindful the president has been a part of the process. I don't think that is a question for me." He said if any credibility issues arise for the markets, it will not arise based on the VAT hike reversal, but on the final product tabled in parliament later this month.
