GOVERNMENT OF ANDHRA PRADESH
COMMERCIAL TAXES DEPARTMENT
Office of
the Commissioner (C.T.)
Andhra Pradesh, Hyderabad
CCT’s Ref No.E3/ 268/2015,
Dated:26 -03-2015.
CIRCULAR
Sub: - A.P.VAT.Act’2005 – Rate of Tax on Cell phone Chargers –
Regarding.
Ref: - 1) Govt.Memo.No. 10427/CT-II(1)/2013-14 dated. 17-05-2014.
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The attention of all the Deputy Commissioners (CT), in the State is invited
to the subject cited, and it is learned that Cell phones are sold along with
batteries
and other items in one sealed box
against a single invoice
consolidated by charging VAT @ 5% treating them as “ Transmission apparatus
incorporating reception apparatus” (HSN.8525.20.17) falls under sub entry(15)
of entry 39 of Schedule –IV of the A.P.VAT.Act’2005 and in terms of the
clarification issued in the reference 1st cited.
In this regard the Advance Ruling Authority has clarified that batteries
meant for cell phones falls under V Schedule liable to tax @ 12.5% vide
A.R.Com/50/2006 Dated. 25.11.2006.
It is however, noticed that all companies manufacturing the cell
phones, manufacture and sell the cell phones in a solo pack which contains a
cell phone and accessories such as battery, battery charger and hearing aids.
The cost of batteries used in cell phones ranging from Rs. 350/- to Rs.2500/depending up on high end models.
In Civil Appeal No.11486-11487 of 2014 (arising out of SLP(c) No.3039830399 of 2011) between M/s.Nokia India (P) Ltd Vs The State of Punjab &
Others, the Supreme Court held that the battery charger sold along with the
cellular phone in an accessory to the phone and is not a part of cell phone. The
Apex court further held that “ the battery charger cannot be held to be a
composite part of the cell phone but is an independent product which can be
sold separately, without selling the cell phone”. Going by the same analogy,
cellular battery sold along with cellular phone is an accessory to the phone and
hence an independent product taxable not under entry of Schedule IV but as an
unclassified item taxable under Schedule V to the Act.
In view of the above, all the Assessing Authorities are instructed to assess
dealers dealing with cell phone batteries at correct rate of tax.
The Deputy Commissioners are instructed to monitor this and submit
compliance.
Sd/- J.Syamala Rao,
Commissioner of Commercial Taxes
To
The Deputy Commissioners (CT) of all Divisions,
The Assistant Commissioners (CT) LTUs and Assistant Commissioners (CT)
Audits of all Divisions/Enforcement Wing.
The Commercial Tax Officers of all Circles in the State,
The Commercial Tax Officers (Intelligence) and Commercial Tax Officers (Audit)
in all Division Offices,
Copy to all Senior Officers in the O/o the Commissioner (CT), A.P., Hyderabad.