BENGALURU: The Karnataka High Court dismissed a batch of petitions filed by VS Products and other manufacturers of tobacco and tobacco products, challenging the constitutional validity of Section 174 of the Goods and Service Tax Act, 2017, which allowed continuation of basic excise duty on tobacco and tobacco products, along with GST.
The petitioners have also questioned Section 136 of the Finance Act, 2001, which enables the authorities to levy National Calamity Contingency Duty on tobacco and tobacco products. The order has come as a setback for manufacturers. “In fact, the choice of the category of goods as in the present case may also be influenced by the objective of discouraging consumption, and accordingly, the choice of the category of goods for the purpose of revenue generation cannot be held to be arbitrary,” said Justice S Sunil Dutt Yadav, while upholding the validity of Section 174 of the GST Act and Section 136 of the Finance Act.