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Report No. 61

8.10. Reason justifying modification of the present interpretation of 'export'.-

One cannot be dogmatic as to whether this interpretation requires modification. If, however, it is felt that the present position causes hardship to aircraft and ships purchasing fuel, by rendering them liable to local taxation, we do not see any objection to the law being amended so as to regard such transactions as in the course of export. The reasons that would justify a special provision for fuel supplied to international carriers are many. Unless there is uniformity in the levy of sales tax on such fuel, airlines or other international carriers would have a tendency to uplift fuel at a place either in a non-taxing country outside India or from States within India where the taxation is low.

This aspect is directly connected with international trade, and with the prevention of discrimination between States. Moreover, there is no direct benefit accruing to the Airlines from the States. Unlike road transport owners (or other internal carriers), who depend on the highways maintained by the State Governments for the efficient running of their transport, airlines or other international carriers derive no such assistance.

Certain Problems connected with Powers of the States to Levy a Tax on the Sale of Goods and with the Central Sales Tax Act, 1956 Back

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