The Bombay high court on Tuesday held that BrahMos Aerospace Pvt Ltd — the joint venture between Russia and India that provides BrahMos cruise missiles to the Ministry of Defence — is not liable to pay sales tax to the Maharashtra government as it only uses a unit in Nagpur to store missile parts.
BrahMos Aerospace had filed a plea before the court in 2015, challenging the sales tax imposed by the Maharashtra government merely for storing imported explosive warheads at a unit in Nagpur.
As per the plea, it imports missiles from Russia and assembles them with “other elements manufactured or bought in Andhra Pradesh” and sells them to the Indian Armed forces. The imported warheads are stored at a unit in Nagpur. For all such sales, it is charged a 14.5% sales tax by the Telangana government as it has a manufacturing unit in Hyderabad.
In May 2015, the assistant commissioner of sales tax, Nagpur, sent a notice to the petitioner saying that since the warheads were stored in Nagpur, the petitioner should to pay tax to the state government that amounted to Rs117.78 crore. The petitioner then challenged this in the HC.