Why Reliance, Tatas, Essar have challenged this law in Supreme Court
Beginning today, the nine-judge bench will hear a batch of over 2000 pleas by manufacturers and associations against the levy of Entry Tax by various state governments.
In a crucial move, a bench of nine judges of the Supreme Court will adjudicate on the constitutionality of Entry Tax today.
Beginning today, the nine-judge bench will hear a batch of over 2000 pleas by manufacturers and associations against the levy of Entry Tax by various state governments.
Simply put, Entry Tax is a tax levied on goods, by a host state on goods manufactured in another state. For example: phones manufactured In Tamil Nadu and shipped for sale to Uttar Pradesh could be liable to face Entry Tax of UP.
The Chief Justice of India TS Thakur, while constituting the bench, observed, "These matters have lingered. The time has come we must discuss (this issue)...There is no way we can escape this".
WHY IS THIS IMPORTANT
The manufacturers opposing the Entry Tax include Reliance, Tatas, Essar, Aditya Birla Group, Jindals and others.
States like Maharashtra, UP and Odisha collect the highest amount of entry tax.
The case is also crucial for the state governments as revenue of over Rs 30,000 crore per annum by conservative estimates is on stake.
Also and more importantly, striking down of the Entry Tax would pave the way for the much sought after Goods and Services Tax.