INDIA. Flemingo India may have to pay sales taxes of up to 100% to the state of Kerala if an appeal to the High Court is unsuccessful.
A Single Judge Bench has directed the state of Kerala to reconsider the retailer’s claim against the application of sales tax on duty free sales at the company’s Trivandrum and Calicut airport stores
But at the moment, the state is refusing to reconsider the claim and is appealing against the judgment, said Flemingo India Director Atul Ahuja.
The state of Kerala imposes sales taxes on all stores run by private operators, but Flemingo has brought the case to court since 10 September 2004 claiming that such taxes should not be applied on duty free sales.
Ahuja told The Moodie Report that the company is now neither collecting nor paying the tax. Hence, the sales tax, which is as high as 100% on liquor, currently does not impact on the company’s sales.
“But by doing so, we are taking a great risk. If we lose the case, we will have to pay tax with penalty from day one,” he said.
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