Taxes on 'Consignments' or 'Stock Transfer' of Goods in India : Revisiting the Stillborn

As the name suggests, “Consignment Taxes” imply taxes on consignment. In India these are also colloquially understood as taxes on ‘stock-transfer' of goods which is how most consignment of goods are effected in the country. These essentially relate to movement of goods from one territory to another, except as a consequence of their sale. The Constitution of India originally did not conceive a tax on such transfers and it was by way of its subsequent amendment that the relevant constitutional provisions were inserted to enable the imposition of the levy. The levy, however, has till date not been effectuated and consignment taxes have virtually remained still-born in India. It is only ironical that a discussion on Consignment Taxes has regained momentum in the wake of the Constitution (One-Hundred and Twenty-Second Amendment) Bill, 2014 currently pending consideration of the Parliament which seeks to usher a new indirect tax regime in India purported as the ‘Goods and Service Tax'. It is in this background that this article seeks to examine the nuances of Consignment Taxes under the Indian law