TIN : (Tax-payer Identification No.)

The formalities for the TIN has now ended. The last date for filing the TIN application without penal fees of Rs. 2,000/- was extended to 28th December, 2005. Thereafter up to 31-12-2005 the applications were accepted with Rs. 2000/- fees. All the Registered dealers who have failed to apply as on 1st January, 2006 will have to apply for new Registration Certificate since the Registration under the MVAT Act has come to an end on account of operation of law (discussed hereinafter).

Queries are received as regards whether the dealer can use earlier RC No. under the BST Act/MVAT after 1st January, 2006. The answer is all the dealers whose Registration Certificate were in force as on 31-12-2005 and who have applied for TIN No. before 31 December, 2005 should continue to use the old Registration No. till the TIN No. is issued. The TIN No. will be issued after 15th March, 2006 and the New TIN No. will be effective from 01 April, 2006.

The queries are also received about C form for the period prior to 31st December 2005 whether they can be now obtained from the Sales Tax Department. Answer is YES. The Officers are instructed to issue C form for all the period prior to 31st December, 2005. The formalities may change a little bit. It is ascertained that almost 92% of the dealers had applied for TIN No. at the end of 28th December, 2005.

Update on Circulars

From 1st April, 2005; i.e., onset of VAT Regime I have from time to time covered the circulars issued by the Commissioner of Sales Tax under MVAT as also under other Acts. The circulars which were not reported earlier are now reported very briefly after I refer to the latest development.

1. Circular 39T of 2005 dated 12th December, 2005
   
   This refers to extension of date for application of TIN No. without levy of fee up to 28th December, 2005 and from 29th to 31st December, there was compulsory fee payment of Rs. 2,000/- for every application of TIN No.
    

2. Circular No. 40T of 2005 dated 15th December, 2005
   
   By this Circular the date for filing of application in form No. 107 is extended up to 31st December, 2005. Form 107 was required to be filed by the Registered Dealer whose turnover had not exceeded the prescribed limit in the year 2004-05 but were desirous of continuing their old RC under VAT regime (refer to earlier Circular No. 5T of 2005; 15T of 2005 and 24T of 2005). This extension was granted with a view to help the dealers to comply with TIN formality.

Notifications under MVAT Act

3. Notification dated 24th October, 2005

By this notification a corrigendum is issued to make new notification of Information Technology products dated 17th October 2005 as effective from 17th October, 2005.

4. Notification dated 21st November, 2005
   
   By this Notification issued under section 17 of MVAT Act, the date for cancellation of existing Certificate of Registration is notified as 1st April, 2006 in case of dealers who make an application in Form 108 before 31st December, 2005 (TIN application). In any other case the date is notified as 1st January, 2006.
    

5. Notification dated 25th November, 2005
   
   This is relating to amendment to MVAT Rules which are already discussed in ITR December 2005 issue.
    

6. Notification dated 16th November 2005
   
   Schedule Entry C-101 of MVAT Act empowers the State Govt. to notify the varieties of sugar, tobacco and textile article subject to 4% tax. This notification dated 1st June, 2005 is amended and Entry 1 is deleted from the said schedule. That means khandsari sugar is now removed from the entry relating to sugar subject to 4% tax. Excise Tariff Entry 17.01 is already covered by the first schedule to the additional duty of excise and hence exempt from payment of tax. The mistake is now corrected by the State Govt. by adding in Khandsari Sugar as an additional entry in Schedule-A as A-52 vide Notification dated 16 November, 2005.
    

7. Circular No. 34T of 2005 dated 26th October, 2005
   
   By this circular the Commissioner of Sales Tax has granted administrative relief to the dealer who has not collected the taxes at the appropriate period during the period 1-4-2005 to 30-4-2005. You would recall major amendments were made to the Schedule Entries by notification dated 1st May, 2005 in which some articles rate of tax was made effective from 1st April, 2005 . The circular has list of items to which the rate was reduced as also the list of items where the rate was enhanced. All those who have not applied for Adm. Relief must refer to Govt. Resolution dated 4th October, 2005 and circular by the Commissioner referred to hereinabove.
    

8. Circular under BST Rules : Circular No. 27T of 2005 dt. 20th October, 2005
   
   This circular was issued in response to the queries by the liquor dealers regarding eligibility of getting set off on stock of liquor held on 30th April, 2001 under BST Act. The Commissioner had clarified that liquor dealer can get set off u/r 42L on the stock of liquor as on 30th April, 2001 if the liquor is sold on or after 1st May, 2001.
    

9. Central Sales Tax Registration & Turnover Second Amendment Rule 2005 dated 14th July, 2005
   
   Amendment to rule 12 (7) relating to furnishing of declaration in 3 months is already discussed by me in the October, 2005 Income Tax Review.
   
   Rule 12 (10) appended to Central Sales Tax Registration & Turnover Rules is also amended. the declaration form prescribed for the purpose of 5 (4) shall be Form H which is to be submitted to the assessing authority up to the time of assessment. Section 5(4) of the CST Act relates to purchases by designated Indian carrier of Aviation Turbine Fuel for international flight. Such purchases are deemed to take place in course of export out of territory of India and hence exempt under CST Act.
   
   Rule 12 (11A) is amended to prescribe form J for the purpose of section 6 (4) of the CST Act. This form is to be furnished to the assessing authority upto the time of assessment. Section 6 (4) was added by Finance Act, 2005 whereby the sale of any goods in course of interstate trade or commerce by a dealer to any official, personnel, consulor or diplomatic agent of foreign diplomatic mission or consulate in India or UN etc. were exempt from payment of tax.
   
   Section 6(4) made it mandatory to furnish a certificate in Form J to be signed by official, personnel, counsellor or diplomatic agent referred to in section 6 (3).
    

10. Notification u/s 8 (5) of CST Act dated 17-5-2005
    
    By this notification inter state sale of Mobile handset shall be calculated at the rate of 0.5% subject to furnishing of C form.
     

11. Circular No. 28T of 2005 dated 24 October 2005 under CST Act

This circular explains the amendment to CST Act by Finance Act, 2005 by amendments to section 2 of CST Act . The definition of sale price under CST Act is amended to specify that the sale price in respect of transfer of property in goods involved in the execution of works contract shall be determined in the prescribed manner by making such deduction from the total consideration of works contract as may be prescribed. Though no rules are prescribed so far it is expected that the prescribed deduction would be on line with the apex Court decision of Builders Association of India vs. State of Karnataka reported in 88 STC 248 (SC).

Amendments are made under CST Act in section 2 (i) whereby the "Sales Tax Law" is defined to mean any law for the time being in force in any State or Part thereof which provides for levy of taxes on the sale or purchase of goods generally or on specific goods expressely mentioned in that behalf and includes VAT law. "General Sales Tax Law" is also defined to mean any law for the time being in force in any state or parts thereof which provides for levy of tax on sale or purchase of goods generally and includes VAT.

Section 2 (ja) introduced by the Finance Act, 2005 defines "Works Contract" to mean a contract for carrying out any works which includes assembling, construction, building, altering, manufacturing, processing, fabricating, erection, installation, fitting out, improvement, repair or commissioning of any movable or immovable property.

Amendment to sections 5 (4) and 5 (5) is already discussed in the earlier para .

Amendment to sections 6 (3) and 6 (4) of CST Act is also discussed in the previous para.

Amendment to section 13 of CST Act. Sub- section (aa) empowers the State to prescribe rules for determination of sale price for inter- state works contract.

Amendment to CST Registration and Turnover Rules

Amendment to Rule 12 as regards C form E-1 form etc. are already discussed by me in October, 2005 ITR.