We’ve talked a lot about strange tax laws around the world, but here are some weird tax cases, throughout the years.
Coconut hair oil was charged a 8% tax on packs that are smaller than 200 mL, so companies began making their hair oil packages larger so that they could avoid the tax. However, the assessing officer decided to name the brand name, Parachute, coconut oil as an edible oil. This made it liable to a tax of 12.5%.
In London, a Subway franchise owner argued in front of the supreme court that his product should be like teas & coffees. He said that sandwiches should not be held liable for value added tax. The judge rejected the plea and ruled that bread sold by Subway contains 10% sugar, which is more than the permitted limit of 2% to make it exempt from value added tax.
Sachin Tendulkhar has long been known to be the “god of cricket”, but in order to save taxes, he argued that he is an actor, and not a cricketer. The Income Tax Appellate Tribunal ruled that his earnings from cricket would fall under income from other sources, and he’s been getting tax deduction benefits on acting ever since 1997.
GST was introduced in Indian 2016 and since then there’s been much confusion about which classifications of products fall under which tax slabs. The Himalaya drug company argued that it’s baby wipes were non-cosmetic products and paid only 12% GST. Instead, the government classified the product as cosmetics and now gets 18% GST on it.
The debate is over about whether Kitkat is a chocolate or a wafer. Nestlé India argued with the government that their product was a wafer with chocolate coating, which gets it a 10% tax instead of the 20% tax which would’ve been assessed if it were the other way around. So finally, it’s decided KitKat is officially a wafer. Mystery solved!
Vodafone took over network service provider Hutch in 2007. In the year 2012, Vodafone was supposed to pay taxes worth Rs 20000 crore and challenged the matter in the supreme court. They won the battle, but when the government came up with the GAAR rules, it gave them the power to dig in to past tax details. Vodafone was ordered to pay the amount with a retrospective effect. Vodafone has since won the case in the international court of Arbitration.
The GST can be assessed differently according to where you are. Kerala Parotta is a much-liked food in the southern part of India. It was charged a tax of 18% GST instead of its cousins from the north like roti and chapati being charged only 5%.
Tax collectors are always trying to find new ways to get their hands on someone’s hard-earned money. These are some strange cases where people actually found loopholes for dealing with their money-hungry governments. But, rest assured….the tax man always gets his cut!
