Report No. 61

Point 7-sale of Controlled Commodities

The position with reference to the taxability of sales of controlled commodities has become uncertain, in cases where the transactions are subject to statutory control. Although, in theory, the rules on the subject appear to be clear, in practice, their application seems to involve nice distinctions, based on how far the consensual element has been abrogated. Accordingly, it is recommended that the position in this regard may be made clear, by a constitutional amendment amplifying the power of the States. Article 366 of the Constitution should be amended for the purpose, by inserting a wide definition of 'sale'.

[Chapter 1C]