The Supreme Court in the case of Commissioner, Commercial Tax UP Vs. Samsung India upheld the decision of the Allahabad High Court, stating that mobile chargers sold as part of a composite package with mobile phones cannot be taxed separately under the Uttar Pradesh Value Added Tax Act, 2008 (UP VAT Act).
A Bench comprising Justice BV Nagarathna and Justice Satish Chandra Sharma dismissed the appeal filed by the State’s revenue authorities, refusing to interfere with the High Court’s judgment from 2018.
The dispute arose when the UP tax department attempted to tax mobile chargers separately at 14% as unclassified items, even when they were sold together with mobile phones as part of a single package. The department relied on the Supreme Court’s ruling in State of Punjab Vs. Nokia India Pvt Ltd, which classified chargers as accessories rather than essential components of mobile phones.
However, the Allahabad High Court distinguished the Nokia judgment, emphasizing that when a mobile phone and its charger are sold together with a single Maximum Retail Price (MRP), they must be considered a composite package. Consequently, the entire package should be taxed under Entry 28 of Schedule II, Part B of the UP VAT Act, which pertains to “cell phones and its parts.”
The Supreme Court upheld the High Court’s reasoning, ruling that the Nokia judgment does not apply to cases where a charger is sold within a single package along with a mobile phone. The Court clarified that such a sale must be treated as a single transaction for tax purposes.
“We do not find any reason to interfere with the impugned order. Hence, the Special Leave Petitions are dismissed. We clarify that this order is not applicable to a case where a charger is sold de hors a mobile phone and separately by itself,” the Supreme Court stated.
Case Details
Case Title: M/S.Naresh Kumar Gupta Versus The State Of Punjab & Anr.
Case No.: SLP(C) NO. 25643/2017
Date: 20-02-2025
Counsel For Petitioner: Advocates Bhakti Vardhan Singh, Ajay Prajapati, Anamika Agarwal, Harshita Raghuvanshi, Prakash Gautam, Aditya Kumar Dube, Ram Shiromani Yadav, and Nagendra Sing
Counsel For Respondent: Senior Advocate Sujit Ghosh with Advocates Mannat Waraich and Ashray Behura
