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PDS wins entry tax relief for Instakart in Patna HC

PDS Legal won relief from entry tax, for e-commerce major Flipkart’s logistics arm Instakart, in the Patna high court.

PDS partner Tarun Gulati and principal associate Kishore Kunal acted for Instakart which had challenged the levy of entry tax on goods brought by Instakart to Bihar for individual residents of Bihar who purchase those goods on Flipkart.

Patna high court chief justice IA Ansari and Justice CS Singh ruled that the entry tax was discriminatory and unconstitutional. CJ Ansari wrote, and Justice Singh agreed, in the judgment that:

When Article 304(a) ensures only equal rate for incoming goods, if such goods are taxed at a higher rate or where they are taxed at any rate, when indigenous goods enjoy concessional rate of tax, Article 304(a) gets attracted. These are simple cases of hostile discrimination. However, one has to determine whether a particular tax is discriminatory or not within the meaning of Article 304(a), the effect of the tax, on the flow of goods from outside the taxing State, has to be taken into consideration and if the overall effect of rebate of tax is such that they fall within the meaning of concessional rates of tax so as to discriminate between imported goods and local goods, the same would amount to discrimination within the meaning of 304(a) of the Constitution.

Read judgment (PDF)

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