SC upholds entry tax

The Supreme Court partly solved a 14-year-old litigation with a nine judge bench upholding the constitutional validity of state legislations levying entry tax on goods coming into their territory from other states.
Entry tax on goods brought into a `local area' for use, sale or consumption therein will be permissible when similar goods are not produced within the tax levying state, said the majority judgment headed by Chief Justice T S Thakur However, the majority judgment put an important caveat. It barred a state from imposing entry tax on goods with the intention of rendering it non-competitive with similar goods produced locally. The judgment will cheer cash-strapped states.

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