Concessional diesel: No relief for Vedanta

New Delhi: The Supreme Court on Friday upheld the Bombay High Court's ruling that Vedanta is not entitled to procure high speed diesel (HSD) at concessional rates against Form C, as the fuel was used beyond specified purposes.

The high court had found that Vedanta used HSD for purposes other than mining, including resale to transporters and private parties. It noted that the company's tax registration certificate restricted the use of fuel to running and maintenance of machinery for mining and processing iron ore for sale. Vedanta had obtained tax registration under the Goa Value Added Tax Act and the Central Sales Tax Act, which was renewed periodically.

After the introduction of the goods and services tax regime in 2017, the company migrated to the new system but continued to pay central sales tax on HSD purchases and retained its VAT registration.


Tax authorities denied issuance of Form C, stating that Vedanta had ceased to be a dealer under the Central Sales Tax Act and that its registration had become infructuous. The department argued that the company was attempting to use Form C to avoid local value added tax of 19% on diesel purchased from Karnataka by availing a concessional rate of 2%.