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SC ruling on LPG: Far reaching implications
Aug 17:
The Supreme Court's decision in the case of Hindustan Petroleum Corporation Ltd against tax authorities which ruled that the bottling of LPG is to be treated as production or manufacture for the purpose of deduction under Section 80-IA of the Income-tax Act, 1961 will have far reaching implication for the sector.
8The Court observed that the word ‘production’ has a wider connotation in comparison to ‘manufacture’, and any activity which brings a commercially new product into existence constitutes production.
8The LPG obtained from the refinery undergoes a complex technical process in the taxpayers’ plants and is clearly distinguishable from the LPG bottled in cylinders and cleared from these plants for domestic use by customers, the Court has ruled.
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8The Court observed that the word ‘production’ has a wider connotation in comparison to ‘manufacture’, and any activity which brings a commercially new product into existence constitutes production.
8The LPG obtained from the refinery undergoes a complex technical process in the taxpayers’ plants and is clearly distinguishable from the LPG bottled in cylinders and cleared from these plants for domestic use by customers, the Court has ruled.
Click on Reports for more
