5 % VAT Leviable on Sale of Liquid Carbon Dioxide: Andhra Pradesh HC

The Andhra Pradesh High Court ruled that liquid carbon dioxide is leviable to VAT, rejecting the petitioner's argument that it should be classified as a non-taxable gas. The court analyzed the chemical composition and end-use applications to determine it fits within the taxable "carbon dioxide" entry under state VAT laws. The judgment clarifies that physical state (liquid vs gas) doesn't alter the essential character of chemicals for tax purposes. This impacts manufacturers and industrial users of liquid CO2 across multiple sectors. The court also dismissed the "declared goods" protection claim, noting CO2 isn't listed under Section 14 of the CST Act. The ₹6.2 crore demand was upheld, establishing important precedent for classification disputes involving chemical products under indirect tax laws.