Empty liquor bottles aren’t scrap: Madras HC

The Madras High Court has held that empty liquor bottles cannot be included in scrap, and TCS (Tax Collected at Source) on empty liquor bottles is not applicable.

The HC bench has observed that the petitioner is neither the owner of the bottle nor generates scrap as is contemplated under the Income Tax Act, 1961. The activity of opening and uncorking is not a mechanical working of material, the court ruled.

The issue raised was whether the petitioner was required to collect TCS from the bar licensees, who have been licensed to run bars under the license issued to them under the Tamil Nadu Liquor Retail Vending (in Shops and Bars) Rules, 2003, under Section 206C of the Income Tax Act, 1961.