Intangibles can be ‘goods’ :
Any movable property is ‘goods’. Thus, intangible property can be ‘goods’.
Sale of Copyright – In Bharat Sanchar Nigam Ltd. v. UOI (2006) 3 SCC 1 = 152 Taxman 135 = 3 STT 245 = 145 STC 91 = 282 ITR 273 = AIR 2006 SC 1383 = 3 VST 95 = 2 STR 161 (SC 3 member bench),
it was also observed that incorporal right of copyright could be regarded as ‘goods’. In CIT v. Sun TV Ltd.(2007) 161 Taxman 351 (Del HC DB), it has been held that right to telecast TV program in foreign countries is ‘sale of goods’.
Trade mark – Trade mark is intangible goods – SPS Jayam & Co. v. Registrar, TNTST (2004) 137 STC117 (Mad HC DB) * Malabar Gold v. CTO (2013) 38 STT 606 = 30 taxmann.com 606 = 58 VST 191 (Ker HC).
In CST v. Duke and Sons (1999) 112 STC 370 (Bom HC DB), it was held that transfer of intangible property like trade mark by mere permission in writing is ‘transfer of right to use goods’ and is taxable. Trade mark itself or right therein need not be transferred.
Royalty collected on mining lease – Royalty to remove minerals is ‘profit a prendre’. No transaction of sale or purchase is involved – Tamilnadu Magnesite Ltd. v. State of Tamilnadu (2007) 9 VST 360 (Mad HC DB) – following State of Himachal Pradesh v. Gujarat Ambuja Cement (2005) 142 STC 1 (SC).
Carbon credit – Certified Emission Reductions (CER) commonly known as carbon credit is ‘goods’ and Vat is payable – Ruling published vide Notification No. 256/CDVAT/2009/43 dated 13-1-2010 issued by Delhi Government [28 VST 29 (St)].
Duty credit scrips which are saleable are ‘goods’ – In following cases, duty credit scrips were held as goods. In Yash Overseas v. CST (2008) 8 SCC 681 = 15 STT 375 = 17 VST 182 (SC 3 member bench), it has been held that DEPB has intrinsic value that makes it marketable commodity. Hence it is ‘goods’. It is like prepaid meal ticket. If DEPB has to be compared with a lottery ticket, it can only be compared with a lottery ticket that has won the prize. The prize-winning lottery ticket ceases to be a mere piece of paper having no value itself. It acquires inherent value and becomes itself a thing of value [Principle applies to Duty Credit Scrips and DFIA as these are transferable] REP Licenses (now DFIA or Duty Credit Scdrips) which can be sold in market at premium are ‘goods’ – Bharat Fritz Werner Ltd. v. Commissioner of Commercial Taxes – (1992) 86 STC 170 (Kar HC) affirmed in 86 STC 175 (Kar HC DB) * P S Apparels v. Dy CTO – (1994) 94 STC 139 (Mad HC DB) * Hemant Spices v. ACST – (1994) 95 STC 336 (Ker HC) * Shivdam Wood v. CTO (1999) 112 STC 87 (WBTT) * Inter Gold (India) v. State of Maharashtra (2010) 3 GST 260 = 29 VST 360 (Bom HC DB) * \\\\\\\\CTO v. State Bank of India (2016) 10 SCC 595 = 341 ELT 481 (SC).
DEPB (Duty Entitlement Passbook Scheme) is freely tradable. It is right to claim back credit. It is freely tradable and is ‘goods’. It is taxable under sales tax. It is not actionable claim. – Philco Exports v. STO (2001) 124 STC 503 (Del HC DB) * Jindal Drugs v. State of Maharashtra 2004 (178) ELT 105 = 17 VST 164 (Bom HC DB) * International Creative Foods v. State of Kerala (2008) 17 VST 178 (Ker HC).
In Vikas Sales Corporation v. CCT AIR 1996 SC 2082 = (1996) 102 STC 106 (SC) = 86 Taxman 369 (Mag) (SC 3 member bench), it was held that REP licenses (now DEPB) have their own value. They arebought and sold as such. It is by itself a property. For all purposes and intents, it is ‘goods’. In Baraka Overseas Traders v. CCT (2001) 121 STC 277 (Kar HC DB), it was held that tax is payable if REP licenses are renounced for a ‘charge’. The charge is nothing but sale.
There can be inter-state sale of DEPB authorisation – Hansa Overseas Enterprises v. State of Andhra
Electricity – In following cases, it was held that electricity is ‘goods’. Electricity has been mentioned in Central Excise and Customs Tariff.
In case of electrical energy, generation or production coincides almost instantaneously with its consumption.Sale, supply and consumption takes place without any hiatus. – – Electricity is movable property though it is not tangible. It is ‘goods’. – State of Andhra Pradesh v. National Thermal Power Corporation (NTPC) 2002 AIR SCW 1956 = (2002) 5 SCC 203 = 127 STC 280 (SC 5 member bench).
The ‘electricity’ is ‘goods’ – CST v. MPEB – (1970) 25 STC 188 (SC) = (1969) 2 SCR 939 = AIR 1970 SC 732 (partly overruled in 2002 only to the extent that it was held in 2002 judgment that electricity cannot be stored). – followed in Indian Oil Corpn. v. CTO (1997) 107 STC 463 (Raj TT) – same view in CMS (India) Operations and Maintenance Co. P Ltd. v. CCE (2007) 10 STT 65 = 9 VST 228 = 7 STR 369 (CESTAT). Electrical energy has been specified in heading 2716 in both Central Excise and Customs Tariff and hence is ‘goods’.
Duty drawback is simply money not goods – Duty drawback received in respect of exports is simply money. It is not goods and no sales tax is payable if exporter receives duty drawback – KMA Finished Leather v. State of Tamil Nadu (2004) 134 STC 185 (Mad HC DB).
Since money is neither goods nor service, GST should not apply on duty drawback.