Kerala High Court to examine whether tax/duty can be levied at check posts on import of eggs from other states

The petitioners operate a business of storing, packing and selling eggs. The Director of Livestock issued an order on July 31, 2024, establishing a right of control after the entry of two paisa per egg. The petitioners are dissatisfied with the fact that the check post authorities are insisting on payment of these check post entry fees for import of eggs from other states from 1st August 2024.

The plea also stated that imposition of entry duty/tax on agricultural produce like eggs, which are zero-rated products, is an indirect and illegal way of levying taxes contrary to the provisions of the GST Act. The plea stated that essential commodities like eggs, fruits and vegetables are categorized as GST exempt products to make them affordable for the customers.

“It is submitted that certain agricultural products such as grains, cereals, milk, eggs, fresh fruits and vegetables are classified as zero-rated supplies under GST, which means that these products are subject to a GST rate of zero per cent, which ensures that they are not subject to any tax charge. These products are included in the NIL GST products. The classification of zero-rated products is generally covered under Schedule 1 of the GST Act, 2017. Specifically, the exemption for eggs is found in Chapter 4 of the GST Rate Schedule,” stated the plea.

The report also states that it is estimated that more than one million eggs are arriving in Kerala every day from other states. It is argued that this will result in huge entry fees for egg traders.

The plea also mentions that states cannot impose taxes or charges contrary to the provisions of the GST Act without specific legislative support. It is also submitted that discrimination between eggs from other states and locally produced eggs is unconstitutional and illegal.

The appeal therefore seeks to quash the order issued by the Director of Livestock imposing an entry fee of 2 paisa per egg and to have it declared illegal and arbitrary.

When the case was brought before Justice Gopinath PThe government’s complainant argued that a statement of claim was filed.

The case will be heard on September 26, 2024.

The plea was filed by Lawyers Praveen K Joy, TA Joy, ES Saneej, MP Unnikrishnan, N Abhilash, Deepu Rajagopal, Albin Varghese, Abisha ER, Fathima Shalu S, Megha G

File number: WPC No. 29173/2024

Case Title: Abdul Rahiman and Others v. State of Kerala