India: Sales tax on warranty replacements; GST on rummy; taxation of receipt of shares for inadequate consideration
Reports about recent tax-related court decisions
Reports about recent tax-related court decisions
The KPMG member firm in India prepared reports about the following tax-related court decisions (read more at the hyperlinks provided below).
- Credit note issued by manufacturer to dealer for auto parts replaced under warranty constitutes a sale subject to sales tax: The Supreme Court held that a transaction in which a manufacturer issued a credit note to an auto parts dealer with respect to auto parts the dealer purchased from the manufacturer, but the dealer had to subsequently replace under a warranty using its own auto parts stock constituted a sale subject to sales tax. The case is: Tata Motors Ltd. v. The Deputy Commissioner of Commercial Taxes. Read a May 2023 report [PDF 410 KB] prepared by the KPMG member firm in India
- Rummy, whether played offline or online with stakes or without stakes, is not gambling: The Karnataka High Court held that rummy is a game of skill and thus is not gambling, whether played online or offline, or with stakes or without stakes. Accordingly, a technology platform that allows users to play rummy against one another online was subject to goods and services tax (GST) at the 18% rate for online gaming services, rather than the 28% rate applicable to lottery, betting, and gambling. The case is: Gameskraft Technologies Private Limited v. Directorate General of Goods Services Tax Intelligence & Ors. Read a May 2023 report [PDF 414 KB] prepared by the KPMG member firm in India
- Receipt of shares of closely-held company for inadequate consideration by amalgamated closely-held company pursuant to an amalgamation is taxable: The Hyderabad Bench of the Income-Tax Appellate Tribunal held that the receipt of shares of a closely-held company for inadequate consideration by an amalgamated closely-held company pursuant to an amalgamation was taxable as income from other sources under Section 56(2)(viia) of the Income-tax Act, 1961. The case is: ACIT v. Vertex Projects LLP. Read a May 2023 report [PDF 414 KB] prepared by the KPMG member firm in India
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