Nikita Badheka,
Advocate

Circulars – 2008

1. Vat Audit 2005-06 & 2006-07

Vide circular dt. 2T/ dt. 29-1-2008 the Hon’ble CST has extended the date of filling of VAT Audit report for 2005-06 and for 2007-08 to 31-3-2008. The High Court has declared 22nd Feb as the pronouncement date for the judgment in w.p. 3206/06. The date for filing revised return pursuant to audit report is extended to 30th April 2008 .

2. Correct and complete returns

Two circulars are issued in a short span by the Commissioner of Sales Tax on this very subject. The instructions issued in the last circular; i.e., 3T/2008 dt. 6-2-2008 is also likely to be revised by the CST as discussed with STPAM.

The common mistakes in the returns as observed in the circular are TIN not recorded, Incorrect TIN recorded, Illegible TIN or affixing of rubber stamp in place of TIN, which is not legible, TIN and name of the dealer are inconsistent, Return period is not mentioned on the return, Return filed in the old forms (repealed forms such as Form 201 instead of Form 221or in BST return form), Tax paid in Banks, not notified for collection of taxes etc. For these reasons the returns do not get recorded against the dealer data including details as to whether the dealer has filed returns or not.

1. Considering the requests received by this office and to remove the inconvenience and difficulties faced by dealers the instructions are issued , a dealer who has already given the copies of the returns in the above manner receives any query for the same returns from any other officer in the same or another functional division, then the dealer may show the acknowledgment to that officer and he will not be required to submit the copies of the Returns again.

2. That the Officer, in any of the functional branches, who obtains the copies, shall furnish an acknowledgment (in the format enclosed in the circular ) to the dealer or practitioner, from whom such copies of the returns have been obtained. The said officer, shall keep copies of the returns with his office and forward another set to the Returns Branch, immediately. Returns branch shall keep a record of such returns received from other offices or obtained by their own officials. The dealers, who apply for the declarations in Form C etc. should furnish a statement (Specified in the Trade Circular No. 1T of 2008) along with proof of the returns filed by them from 1-4-2005 onwards. The dealers are advised to furnish 2 copies of the said statement, so that one of the copies can be returned as acknowledgment. A dealer who has already given the copies of the returns in the above manner receives any query for the same returns from any other officer in the same or another functional division, then the dealer may show the acknowledgment to that officer and he will not be required to submit the copies of the Returns again. After discussions the CST has agreed to issue the instructions that instead of copy of return a dealer may give copy of challans on the basis of which the Sales Tax officials will try to trace the return. In case they are unable to find return they may ask for copy of return/s. This exercise is aimed at removing the difficulties faced by the dealers/Tax practitioners.

Recent amendments and notifications

3. Under the Luxuries Tax Act a notification was issued on 8th May, 2007. By this notification the Government of Maharashtra in the public interest exempted from the payment of the whole of tax, all classes of luxuries provided in hotel or lodging house to the officers of the consulate holding diplomatic or consumer status; official guests of the consulates and diplomats attending conference, seminars etc.; and Trade Commissioners, Assistant Trade Commissioners and Trade agents of the countries specified in the Schedule appended thereto, subject to the conditions specified therein. By the notification dt. 4-2-2008 from the list of countries the name ‘Spain’ is removed. This means officials of Spain will not be entitled to any relief in luxuries tax.
    

4. Amendment to schedule entries of MVAT Act

1. An exception is made to entry B-1 relating to articles made of precious metals of fineness not less than fifty per cent whether or not containing precious stones, semi precious stones, diamonds or pearls whether real or cultured. Now this entry excludes the articles to which entry C-105 applies. Entry C-105 is for Zari and embroidery materials of gold, silver and gilded metal, badla and kasab.

2. Simultaneously entry C-105 is substituted by the same notification. The new entry is as follows :

“105 Embroidery or Zari material that is to say,

(i) imi, (ii) zari; (iii) kasab; (iv) saima; (v) dabka; (vi) chumki; (vii) gota; (viii) sitara; (ix) naquasi; (x) kora; (xi) glass beads; (xii) badla; (xiii) gizal; (xiv) embroidery machines; (xv) embroidery needles.” The rate of tax continues to be at 4%.

5. Amendment to Entry C-107 (2) concerning capital goods as may be notified by
   
   the State Government from time to time in the Official Gazette. By notification VAT -1505/CR-233/Taxation-1 dt 23rd Nov., 2005, list of medical devices and implants were notified for reduced rate of tax of 4%. Nebulizer covered by customs entry 90192090 is added to this list of capital goods. 6] Amendment to sec A (28) : In Sch-A –(28) column (2), for the words “Human blood and human blood plasma” the words, “Human blood and components and products thereof” are substituted by notification dt. 1-2-2008. The scope of entry is widened by this amendment.

6. Amendment to C-58 : By notification dt. 1-2-2008 this entry is also substituted. The new entry divided in two reads – 58(a) Kerosene oil sold through the Public Distribution System; (b) LPG for domestic use sold on or after 18th April 2006. Earlier this entry covered Kerosene oil sold through the Public Distribution System.

7. Amendments to Entry C-107 (11) : Clause ‘f’ to this entry is deleted w.e.f. 1-2-2008. All the items and articles covered by this clause will now be subject to 12.5%. This cl. ’f’ covered – Food stuffs and food provisions of all kinds including raw, semi cooked or semi-processed foods, ready to mix and ready to cook preparations excluding ready to serve foods. Consequential amendment is made to explanation to the said clause to remove ‘f’ .

8. Amendment to Sch-D (4) : For the words “molasses and rectified spirit”, the words “molasses, rectified spirit, absolute alcohol and extra neutral alcohol” are substituted w.e.f. 1-2-2008.

9. Amendments to C S T Act: Sec 11 (1 ) of CST act refers to Cognizance of offences by the court. As per this provisions no court shall take cognizance of any offence punishable under this Act or the rules made thereunder except with the previous sanction of the Government within the local limits of whose jurisdiction the offence has been committed or such officer of that Government as it may specify. This amendment specifies following officers for exercising powers under Sec. 11 (1) of CST Act. Notification dt. 4-2-2008 – They are

1. the Commissioner of Sales Tax,

2. the Additional Commissioner of Sales Tax,

3. the Joint Commissioner of Sales Tax,

4. the Deputy Commissioner of Sales Tax.

This appears to be the exercise for punishing the non filers of returns under the CST Act.