Holding that the mobile/cell phone charger is an accessory to cell phone and is not a part of the cell phone, a Supreme Court Bench comprising of Justice S.J. Mukhopadhaya and Justice M.B. Lokur observed that the battery charger was hence liable to be taxed at general rate i.e. 12.5% and not at concessional rate applicable to the cell phones.
The 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.
The appeals were filed by the State of Punjab and others, against a 2010 order passed by the Punjab and Haryana High Court at Chandigarh. The High Court had held that the cell phone battery charger is sold as composite package along with cell phone, and hence said charger cannot be excluded from the Entry for concessional rate of tax which applies to cell phones and parts thereof.
The respondents, Nokia India Pvt. Ltd. had asserted that the product was being sold as mobile/cellular phone under a single solo pack unit and was covered under Entry No.60 of Schedule ‘B’ of the Act and that no separate amount for battery charger was being claimed from the customers, and that only amount charged was for handsets.
It was also stated by them that for subsequent sale of the battery charger and the battery in the State of Punjab, Tax/VAT at the rate of 12.5% was being deposited.
The Assessing Authority, through a detailed common order in March held that the battery charger being a separate item was liable to be taxed at general rate i.e. 12.5% and not at concessional rate applicable to the cell phones on the premise that the respondents were selling more than one product which were eligible in different rate of tax in a single pack and had themselves admitted the battery charger as a separate commodity was liable to payment of tax at the rate of 12.5% applicable to the goods in residuary Schedule ‘F’ to the Act.
Read the Judgment here.