Supreme Court asks Pepsi to pay duty to Himachal for sale of potato chips

New Delhi, Feb 18 (PTI) The Supreme Court today directed food and beverages major Pepsi to pay 50 per cent of the duty demanded by the Himachal Pradesh government for selling potato chips in the state.

A bench comprising justices Mukundakam Sharma and A R Dave asked Pepsico India, holding company of Pepsi India to pay half the amount within two weeks demanded by the state government under the Himachal Pradesh Value Added Tax Act, 2005.

The state government had raised a demand of around Rs 6 crore on sale of potato chips in the state by imposing a duty of 12.5 per cent.

This was opposed by Pepsi and it contended that potato chips come under the classification of processed fruits, vegetables which includes fruit jams, jelly, pickles, fruit squash, paste, fruit drink & fruit juice and attracts concessional duty of 4 per cent only.

However, the state government said potato chips fall under the residuary entry as it was not mentioned in the list of processed vegetables in the Schedule under the Himachal Pradesh Value Added Tax Act.

This was challenged by Pepsi before the Himachal Pradesh High Court, which had rejected the company”s claim.

Pepsi sells potato chips under the brand name ”Lays” and ”Uncle Chips”.

Courtesy: Press Trust of India

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