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INDirect Taxes
Sales Tax Update
Nikita R. Badheka
Advocate
Maharashtra Value Added Tax Update
In the first article on 'VAT' in IT Review of
April, 2005 I had discussed up to section 5 and thereafter the circulars issued
by the Commissioner of Sales Tax. In the later two issues the set off provisions
were discussed at length for the normal dealer as also for the contractors
specially Builders. In the present article I have firstly given Gist of very
important Central Sales Tax Rules and thereafter Gist of Circulars issued by
Commissioner of Sales Tax (CST). The number of clarificatory circulars being
issued by CST reminds us of Circular Raj. It also confirm that VAT is not an
easy on it was canvassed to be.
Central Sales Tax Rules, 1957
1.1 Quarterly ‘C’ form
Before I go to the
Maharashtra Value Added Tax Act one very important amendment, having far
reaching effect, made to the Central Sales Tax Rules must be taken note of by
all concerned. The CST Registration & Turnover Rules are amended vide
Notification dated 14-9-2005. The amendments are made to Rule 12 (1) of Central
Sales Tax Registration & Turnover Rules, 1957. Second and third provisos are
deleted and instead a new proviso is substituted. The old provisos provided that
a single declaration in form-C may cover all the transactions which takes place
in one financial year between the said two dealers. It also provided that if in
a transaction of sale the delivery of order is spread over two financial years
then dealer shall furnish separate declaration in respect of each financial
years.
1.2
The new amended proviso now provides that a single declaration may cover
all the transaction of sale which takes place in a quarter of financial year
between the same two dealers. This means instead of one C form for each year now
the dealer will have to submit one C form for each quarter i.e. four C forms for
each financial year. The new amendment also provides that if in any transaction
of sale, delivery of goods is spread over in two quarters or over different
financial years it shall be necessary to furnish separate declaration for goods
delivered in each quarter of a financial year. The rules is effective from
1-10-2005. This means for the period upto October, 2005 i.e. from 1-4-2005 to
30-9-2005 the dealer will have to obtain separate C form and thereafter one C
form for each quarter for transactions between the same two dealers.
1.3 Submission of C/F/E1-E-II within three
months
One more sub-rule
is substituted which is Rule 12(7). As per this sub-rule before substitution the
declaration in Form C, F or certificate in E-1/E-II could be furnished to the
assessing authority till assessment. The proviso to sub-rule 7 extended the time
for furnishing the declaration, on the prescribed authority being satisfied
about the cause of delay in furnishing certificate or declaration.
1.4
As per the substituted sub-rule 7 of Rule 12, effective from 1-10-2005, the
declaration in Form C or Form F or Certificate in E-1/E-II shall be furnished to
the prescribed authority (Assessing authority) within 3 months after end of
period to which declaration or certificate relates. Like the earlier proviso the
new proviso also permit condonation of delay on furnishing sufficient cause. As
a result of this amendments the C form, and E-1/E-II will have to be collected
within 3 months from the end of the quarter and submitted to the assessing
authority. Needless to add when the declarations/ certificates are submitted the
assessing authority would also check the same, compare it with the invoice etc.
1.5
The periodicity of furnishing F form as per Rule 12 (5) is one month only.
Therefore all the dealers selling the goods against form F, i.e. effecting
branch transfer or consignment sales will have to collect the declarations
within next 3 months and submit the same before the assessing authority . This
would definitely mean grave hardship and harassment to the dealers for obvious
reasons.
Finance Act, 2002 – Effective date
1.6
While on the issue of CST Act I must mention one circular by the Commissioner of
Sales Tax being Circular No.22T of 2005 dated 28-9-2005. You will recall the
Finance Bill (2002) amendments which were effective from 11-5-2002. They were
sought to be made effective by the Commissioner of Sales Tax from 1-6-2002. A
circular to this effect was also issued being No. 15-T of 2002 dated 27-5-2002.
In fact an advertisement in the newspaper to that effect also appeared on
30-5-2002. However the proposal of the Commissioner to make the amendments
effective from 1-6-2002 is turned down by the State Government and therefore now
all the amendments made to the CST Act by Finance Bill 2002 are made effective
from 11-5-2002 . The amendments are discussed in the review of the concerned
month in 2002.
2.
Amendments to MVAT Act
After April 2005,
vide notification dated 1-5-2005 many schedule entries are amended.
Notifications dated
1-6-2005 introduced composition scheme which superseded earlier notification.
Majority of amendments are explained by way of Circular by the Commissioner of
Sales Tax. I would therefore discuss the Circulars first.
3. Circulars
The Circulars
issued by the Commissioner of Sales Tax (hereinafter referred to as CST) are
divided in two parts (A) issued under MVAT Act (B) other than MVAT Act.
(A) Circulars issued under MVAT Act :
(Circulars up to No. 11T are detailed in April 2005 ITR)
3.1 VAT-12T 2005 dated 8-6-2005
Subject :
Clarification regarding seeds of all types (A-41)
Entry A-41 as on 1-4-2005 read as “seeds of all
types”. This entry was amended on 1-5-2005. After amendment it read as “Seeds
excluding seeds to which any other entry of Schedule C applies”. By this
circular the Commissioner of Sales Tax has clarified that all types of sawing
seeds are covered by entry A-41. Sawing seeds would include sawing seeds, of
cereals, pulses as well as for oil seeds. It is also clarified that in addition
to sawing seeds certified seeds and truthfully label seeds, nuclear seeds,
foundation seeds, and breeder seeds of all types would also be covered by this
entry. Oil seeds not meant for sawing purpose are however not covered by this
entry. Such seeds would be classified under C-68 subject to 4%. Tamarind seeds
not meant for sawing are covered by C-107 (13) subject to 4%.
3.2 VAT 13T 2005 dated 8-6-2005
Subject :
Clarification regarding “ores and minerals” ( C-69)
Entry C-69 as on
1-4-2005 read as “ores and minerals” excluding sand. On and with effect from
1-5-2005 words excluding sand were deleted. After amendment, the entry reads as
“Ores and minerals”.
On the issue
whether boulders extracted from earth would be covered by the scope of the entry
C-69, the C S T referred to the definition under the Mines and Minerals
(Regulation and Development) Act, 1957. The definition reads as follows:–
(e) “Minor minerals” means building
stones, gravel, ordinary clay, ordinary sand other than sand used for prescribed
purposes, and any other mineral which the Central Government may, by
notification in the Official Gazette, declare to be a minor mineral;
The Central
Government has also issued a Notification in exercise of the powers delegated to
it under this definition. By this notification, “boulders, and chalcedony
pebbles” are declared to be minor minerals for the purposes of that Act. Any
dealer wishing to extract boulders from earth is required to obtain permission
from the authorities concerned under the Maharashtra Minor Minerals Extraction
Rules. Boulders can ordinarily be obtained only by extraction from the earth. In
view of such considerations, it is clarified by the C S T that building stones,
boulders and khadi and gitti obtained from building stones and boulders being
minor minerals would be adequately covered by the scope of the entry C-69 w.e.f.
the 1st April, 2005.
3.3 Circular No. 14 T of 2005 – dated 13th
June, 2005
Sub: Extension
of date:–
1) Submission of closing stock Statement.
2) Application under
the Composition Scheme.
Closing stock statement
The date for
submitting the statement of closing stock of goods and capital assets as on the
31st March, 2005, which was initially notified as 30th April, 2005 was extended
to 15th June, 2005 by the circular at reference number (1) above the date was
extended further up to 15th July, 2005.
However, in the
case of the dealers who are required to file monthly returns and who wish to
claim the set-off of closing stock as on 31st March, 2005 in the return for the
month of May 2005, the last date for submitting the closing stock statement was
25th of June, 2005. But if the dealer does not wish to claim the set-off of
closing stock in the return for the month of May 2005, then in such cases the
last date for submission of closing stock statement was 15th July, 2005.
In other words, the
set-off on the closing stock as on 31st March, 2005 can be claimed only after a
closing stock statement in the prescribed form is filed with the Department
3.4
Application under the Composition Schemes
Different
Composition Schemes are declared under section 42 of the Maharashtra Value Added
Tax Act, 2002. The schemes are voluntary and the eligible dealers wishing to
join the schemes were required to apply before the 30th April, 2005. This date
was extended under the circular at reference No. 2 to 15th June, 2005. It was
further extend up to 15th July 2005.
It was expressly noted that no further extension
of last date will be done for both the above mentioned purposes.
3.5 Cir. No 15- T of 2005 – Dated 1st July,
2005
Sub. : Extension
of date of filing of the application in Form 107
Vide para 1.3 of Trade Circular No. 5T of 2005,
dated 4-5-2005 a provision has been made for continuance of BST RC of those
dealers whose turnover in the year 2004-05 had not exceeded the prescribed
turnover limit under MVAT Act 2002 but who are desirous of continuing their old
BST RC under the MVAT Act. Such dealers were required to fill Form 107 and
submit the same along with the BST RC to the respective assessing authority
before 15-6-2005.
Considering several representations, the date of
filing of Form 107 by the dealers covered by paragraph 1.3 of this office’s
Trade Circular 5 T of 2005 was extended to 30-7-2005.
The other conditions and directions as mentioned
at sub paragraphs (a), (b) and (c) of paragraph 1.3 of the circular referred as
above continued to apply to the dealers desirous of availing the benefit of the
time limit so extended.
It was also clarified that Dealers who do not
apply for relief as detailed hereinabove within the extended time limit, that
is, on or before 30-7-2005 will be treated as unregistered dealers with effect
from 1-4-2005.
3.6 Circular No. 16 T of
2005- dated 7th July, 2005
Sub: Industrial Cables (High voltage cables,
Plastic coated cables, Jelly filled cables, Optical fibre cables)
Entry 53 in Schedule C appended to the MVAT Act,
2002 reads as follows:
“Industrial Cables (High voltage cables, Plastic
coated cables, Jelly filled cables, Optical fibre cables)”.
The Commissioner of Sales Tax has clarified its
scope and limit as follows:–
2. Entry C-53 would cover the items shown
in column 2 of the Table below. The column 2 of the Table provides the
description of the goods. Column 3 provides the corresponding tariff heading,
sub-heading or tariff item from the Central Excise Tariff Act, 1985.
Sr. No.
Description
Central Excise
Tariff
heading
1. Winding wire of
copper 8544.11
2. Other 8544.19
3. Co-axial cable and other co-axial electric conductors
8544.20
4. Ignition wiring sets and other wiring sets of a kind used in
vehicles, aircraft or
ships
8544.30
5. Other
electric conductors, for a voltage not exceeding 80 V fitted with
connectors
8544.41
6. Telephone cables
8544.49
7. Other
electric conductors, for a voltage exceeding 80 V but not exceeding
1000 V fitted with
connectors 8544.51
8. Other
8544.59
9. Other
electric conductors, for a voltage exceeding 1000
V 8544.60
10.
Optical fibre
cables
8544.70
3.7 Trade Cir.- 17 T of
2005 Mumbai Dt : 14-7-2005
Sub: Grant of set-off under the Maharashtra Value
Added Tax Rules 2005.
By this Circular the Commissioner of Sales Tax
has given clarification for certain set off rules under the MVAT as follows:–
1) 1) Goods in transit:
a] There
would be cases where the goods are sold by the vendor in the month
of March, 2005. The goods so sold are received by the purchaser in
the month of April, 2005. If the purchaser has accounted for such
purchases in the month of March, 2005, then he should continue to treat such
purchases as made in the year 2004-2005.
b]
There is a practice among some dealers to account for such purchases at the time
the goods are physically received by them. In such a case, the purchases would
be accounted for by the purchasing dealer in the month of April, 2005. Such
purchases would not, therefore, appear in his opening stock as on the 1st April,
2005. If the purchases are accounted for in April, May or June 2005 and have not
been considered in the opening stock of goods as on the 1st April, 2005, then
the purchaser may claim set off towards such purchases in the month of April,
May or, as the case may be, June 2005.
c] In such cases, the grant of set off
would be restricted to sales tax. There will be no set off of turnover tax,
surcharge or resale tax levied under the Bombay Sales Tax Act on the sales of
such goods. The set off on such purchases should be calculated at the rates
applicable under the B.S.T. Act. The transaction of purchase should be supported
by a proper invoice issued under the B.S.T. Act, 1959. If, in such invoice,
taxes are charged separately, then set-off of the sales tax charged would be
available. If it is a ‘tax inclusive’ invoice, then the tax element contained in
the purchase price should be calculated by using the formula given in rule 44D
of the Bombay Sales Tax Rules 1959 and set-off should be claimed accordingly to
that rate. This concession is available only towards purchases accounted for in
the months of April, May or June 2005. The concession would not be available if
the purchases are accounted for at any time thereafter.
2) Rule 51[1][b]
Certain queries
were raised regarding the stock statement which is required to be filed
regarding the stock held by the dealers at the close of business on the 31st of
March 2005. The issues and clarifications by the Commissioner of Sales Tax are
as follows:
i] Rule 51[1][b] of the Maharashtra Value
Added Tax Rules states that set-off under that Rule will be granted towards
goods held in stock by the claimant dealer in respect of purchases covered by
any of the earlier laws other than the Bombay Sales Tax Act, 1959. Such set-off
in respect of the earlier laws will only be in respect of a sum collected
separately from the claimant dealer by the other registered dealer.
The query is whether set-off on purchases under earlier law will also include
purchases by way of Works Contract and Lease. It is clarified that purchases
mentioned in the Rule 51[1][b] will include purchases by way of Works Contract
and Lease. The set-off will be available in respect of such purchases subject to
the provisions contained in the Rules. Such purchases can accordingly be
included in the Stock Statement.
ii]
There are some dealers who effect both [a] local purchases as well as [b]
inter-State purchases, import purchases or purchases from unregistered dealers
[taxable purchases]. They normally pay taxes in each month or quarter by adding
the gross profit on their taxable purchases and pay taxes on presumptive basis.
The tax is, thus, not paid on identification. Such methods are consistently
followed over the years in assessments of some dealers. In such a case, as far
as sales tax assessments are concerned, the closing stock is deemed to consist
of purchases made from registered dealers. In actual fact, of course, the
closing stock would consist of purchases made from registered dealers as well as
taxable purchases.
Replying to the query as to how such dealers should file stock statement and
claim set-off, It is clarified by the Commissioner of Sales Tax that the stock
statement has to be filed as provided in the Rules. If the stock consists of
taxable goods as well as purchases effected from registered dealers, then such
details will have to be provided. The related issue is regarding the claim of
set-off. On taxable purchases, the dealer might have paid tax during the course
of the year on presumptive basis. If such be the case, the claimant dealer
should ascertain the tax paid by him [on presumptive basis] on the taxable goods
which are actually in stock. He should claim set-off of such tax paid as if it
is tax paid separately on purchases.
During the assessment for the year 2004-05, in the cases of such dealers, tax
will of course be assessed and recovered on taxable purchases as has been done
in their cases over the years.
iii] If
the business has been transferred with effect from the 1st April 2005 or if
there is a change of the constitution of the business with effect from the 1st
April 2005, then if the earlier business was entitled to claim set-off on stock,
then the successor business will be entitled to claim set-off of the goods in
stock as on the 31st March 2005 in accordance with the rules. In such a case,
the stock statement should be filed by the successor business/businesses.
iv]
IMFL and country liquor has been under VAT since the year 2000. The permit rooms
and vendor shops as well as wholesalers have been paying tax on their sales and
claiming set-off on their purchases. Therefore, such liquor dealers [other than
manufacturers or importers] need not file stock statement to the extent of
liquor held in stock by them on the 31st March 2005.
3.8 Extension of date of
submission of closing stock statement:
(a) The
date of submitting the statement of closing stock of goods and capital assets as
on 31st March 2005, which was initially notified as 30th April 2005 and was
extended to 15th June 2005 and 15th July 2005 by the circular. In view of the
instructions contained in the present circular, the date was extended to 16th
August 2005.
(b)
However, in the case of dealers who are required to file monthly returns and who
wish to claim set-off of closing stock as on 31st March 2005 in the return for
the month of June 2005, the last date for submitting the closing stock statement
will be 25th July 2005. But if the dealer does not wish to claim the set-off of
closing stock in the return for the month of June 2005, then in such cases the
last date for submission of closing stock statement was 16th August 2005.
Thereafter, the set-off can be claimed in the return to be filed on the 25th
August 2005.
3.9 Cir. No. 18 T of 2005
Mumbai, dt. 18 July 2005
Sub : Rail Coaches, Engines, Wagons etc.
The Entry C-80 of MVAT reads as follows:
"Rail coaches, Engines and Wagons and parts
thereof"
The applicable rate of tax is 4%. Queries were
received from different suppliers of railways as to which items would be
recognized as parts of coaches, engines, wagons etc. It was difficult to
enumerate in detail the different items which constitute parts for the purposes
of this entry. In view of the problems faced by the trade and industry, it is
clarified that if the purchasing officer of the Railways certifies that the
items being purchased are parts of rail coaches, engines and wagons then such
certificate would be accepted as sufficient proof of the items supplied, being
covered by the scope of the Entry C-80. Such certificate should be kept by the
supplying dealer in his own record and should not be attached with the returns.
No separate mention of such certificate is required to be made in the return.
The above clarification is restricted to the supplies falling under Entry C-80.
It does not apply, directly or indirectly to any other entry.
3.10 Trade Cir. - 19 T of
2005 Mumbai Dt : 18.7.2005
Sub: Advisory Visits for newly registered
dealers.
Under the MVAT Act, 2002, the registration
process has been significantly changed and simplified. Now the registration
certificate is granted without visiting the place of business as it was done in
the BST regime.
2. A new function of advisory visit is
added under the registration process. Accordingly, a new advisory visit cell has
been formed. The advisory visit team will visit the place of business of newly
registered dealers normally within 3 months from issuance of the registration
certificate. The team will come for visit with prior appointment. The main
functions of the advisory visit team are as follows;–
• Appraise the dealer about
VAT provisions, composition schemes, notifications & latest circulars.
• Give advice on how to
keep books of accounts.
• Explain to the dealer how
to file correct, self consistent and complete return.
• Give the dealer relevant
leaflets published by the department.
• Suggest to the dealer
amendment in registration certificate, if it is necessary.
• Answer the dealer’s
queries regarding VAT provisions.
• Verify the details
submitted in Form No 101.
• Determine the date of
liability and assess the dealer for unregistered period, if any.
• The registration record
under the CST Act and transactions, if any, related to inter-state purchases
and sales will be checked.
• The officer will interact
with the dealer to find out the nature of his business, his suppliers,
purchases & sales.
Any additional information regarding associated
family businesses, previous dealings with the Sales Tax Department etc. will be
recorded.
The officer on advisory visit will ask the dealer
about the valuation of stock of goods held by him; the officer will merely
observe the stock and will not take physical item wise details.
3. Since the advisory officer has to
determine the date of liability of the dealer, he needs to verify the books of
accounts and other related documents. It is the duty of the dealer to keep ready
the books of accounts at the time of the visit. He should not make excuses for
non-production of books. If at all he has any genuine difficulty in production
of the books of accounts on the given date, he must, on receipt of the
intimation of the advisory visit, inform the advisory officer and request for
alternate date within 7 to 10 days.
4. The advisory visit team will handover
a feedback form and postage paid envelop to the dealer. It is requested that the
feedback form should not be handed over to the advisory visit team. The dealers
are requested to fill the feedback form along with suggestions about the
registration process and send it by post to the department.
3.11 Trade Cir. 20 T of 2005 Mumbai Dt.
20-7-2005
Sub :
Composition Scheme under Section 42 of the MVAT Act, 2002.
Under section 42 of
the Maharashtra Value Added Tax Act, 2002, the State Government is authorised to
prescribe composition schemes for different types of dealers. The State
Government had accordingly issued a Notification bearing number
VAT-1505/CR-105/Taxation-1 dated the 1st April 2005 for the purposes of the said
Section. The scheme was revised in important details with effect from the 1st
June 2005 under notification number VAT-1505/CR-105/Taxation-1, dated 1st June
2005.
Certain queries were received regarding the
Notifications issued under Section 42 and their implementation. The queries and
clarification by the Commissioner of Sales Tax thereon are as below :
Sr.
Question
Clarification
No.
[a] Whether
the composition scheme The Composition Scheme published
under the
notified vide notification dated Notification
dated the 1st June 2005 would be
1.6.2005 would be effective from effective
from the 1st June 2005. In other words,
1.4.2005 or from 1.6.2005 ? the revised
tax rates, change in procedures etc.
would all be effective from the 1st June and not
from any
earlier date.
[b] Whether
application for composition Once a dealer
is under Composition, then he
is required to be made separately at will
continue to be under composition unless he
the beginning of each year or whether
decides to opt out of the Composition Scheme
the application once made will or
unless his eligibility for Composition Scheme
continue to be in force perpetually? is
cancelled by the Department. In other words,
it is not necessary to made a fresh application
for
Composition Scheme at the beginning of
each
year.
[c] During
the intervening period 1.4.2005 If any
dealer has collected tax during the period
to 31.5.2005, some dealers eligible for 1st April
2005 to 31st May 2005, even then he
composition may have collected tax may
still opt for the composition scheme with
on their sales. However, in view of effect
from the 1st June 2005. For the period of
the revised composition schemes, two months,
namely, April and May 2005, he
how should such dealers opt for the would
be a normal VAT dealer while for the
scheme now ? subsequent
periods, he would be under Composition.
[d] Some
dealers may have filed applica- If any
dealer wishes to opt out of the
tion for composition. How can such
composition scheme in view of the revision of
dealers opt out of the scheme at the the nature of the
scheme, then he may do so by
stage in view of the revised making an
application to the authority to whom
notification? he
had made an application for composition. The
cancellation would take effect from the date
mentioned by him in this regard in his application.
Such applications, however, should be made before
the 16th of August 2005.
If the
application is not made by this date, then
it will
be presumed that the dealer does not wish to
opt out of the composition scheme in the current year.
His eligibility for composition in such a case can only be
cancelled with effect from the 1st April 2006.
[e] Caterers
have been included in the
scheme for restaurants, eating house,
hotels, etc. Accordingly, the compo-
sition amount payable by such
caterers stands increased from 6%
to 8%. Such caterers may not have
factored the tax of 8% into the
catering charges for the period
1.4.2005 to 31.5.2005.
[i]
Whether caterers are required to [i] For
the first query, the answer is that
pay composition at higher rate
for the period 1st April 2005 to 31 May
of 8% also for the period 1.4.2005 2005,
the caterers would be required to pay
to 31.5.2005 ?
composition at the then prevalent rate of
6%.
However, from 1st June 2005 onwards they will
have to pay tax at the rate of 8%.
[ii]
Whether caterers who have [ii] As explained in
the reply to the query at
applied for composition earlier
[d] above, such caterers may opt out of the
can opt out from 1.6.2005
composition scheme by making an
onwards
? application for cancellation,
before the 16th
August
2005.
7. The composition schemes are voluntary
and the eligible dealers wishing to join the schemes were required to apply
before the 30th April 2005. This date had been extended under the circular at
reference No.1 to 15th June 2005. It was further extended upto 15th July 2005
vide circular at reference No.2. It is now decided to further extend the date to
16th August 2005.
3.12 Trade Cir.- 21 T of 2005 Mumbai Dt : 22nd
July 2005
Sub: Screws,
nuts, bolts, fasteners, coach screws, screw hooks, revets, cotters, cotter pins,
washers including spring washers.
The Entry C-107
(10) of MVAT Act reads as follows:-
“Screws, nuts,
bolts, fasteners, coach screws, screw hooks, revets, cotters, cotter pins,
washers including spring washers”. The scope of this entry is explained by the
Commissioner of Sales Tax.
The Entry is a reproduction of heading 7318
contained in Chapter 73 of the Central Excise Tariff Act, 1985. It is well
established that for the purposes of the Central Excise Tariff, screws, nuts,
bolts etc. made from iron and steel are to be considered to be parts of general
use notwithstanding that they have been manufactured for use in a particular
machine. It is accordingly clarified that screws, bolts, nuts etc. manufactured
from iron and steel will continue to be covered by the scope of this entry even
if they have been specifically manufactured for use with other instruments,
articles or goods of merchandise.
3. The same
clarification will continue to apply even when the screws, nuts, bolts etc. are
made from non-ferrous metals or any substance other than iron or steel.
3.13 Cir. No. 22 T of 2005 Mumbai, dt. 6-8-2005
Sub :
Designation of the officers under Maharashtra Value Added Tax Act, 2002 (Mah. IX
of 2005).
Ref :
Government Notification No.VAT-1505/C.R. – 221/Taxation-1 dated 14th July 2005.
In exercise of the powers conferred by
sub-section (1) and (2) of section 10 of the Maharashtra Value Added Tax Act,
2002 (Mah. IX of 2005), the Government of Maharashtra has issued a notification
on 14th July 2005 referred to above. By this notification, the Government of
Maharashtra has appointed different officers working under Bombay Sales Tax Act,
1959 to be the officers for carrying out the purposes of Maharashtra Value Added
Tax Act, 2002.
The designations of the officers are as follows:-
Sr.
Designation of the officers under the Corresponding designation
of the officers for
No. Bombay Sales Tax Act, 1959 the purposes
of the Maharashtra Value
Added
Tax Act, 2002
1.
Commissioner of Sales Tax Commissioner of Sales Tax
2.
Additional Commissioner of Sales Tax Additional
Commissioner of Sales Tax
3. Deputy
Commissioner of Sales Tax Joint Commissioner of Sales Tax
4. Senior
Assistant Commissioner of Senior Deputy Commissioner of Sales
Tax
Sales Tax
5.
Assistant Commissioner of Sales Tax Deputy Commissioner of Sales Tax
6. Sales
Tax Officer, Class-I Assistant Commissioner of Sales
Tax
7. Sales
Tax Officer, Class-II Sales Tax Officer
3.14 Trade Cir.- 23 T of 2005 Mumbai Dt : 8th
August 2005
Sub :
Agricultural Implements
Schedule Entry A-I.
Entry A-1 of MVAT
Act reads as follows:–
“Agricultural implements manually operated or
animal driven as may be notified by the State Government from time to time in
the Official Gazette”. The scope and limits of this query are explained by the
Commissioner of Sales Tax.
2. Under the entry, the State Government
has been authorised to issue a notification listing different agricultural
implements. A notification has been duly issued on the 1st April 2005. It has
been revised once on the 1st June 2005. It has been pointed out by some querists
that at Serial Number 50 of the Schedule attached to the Notification, an
implement named “planter" is specified. The query is whether the earthen or
plastic containers will be covered by the scope of this Notification.
3. It may in the first instance to be
pointed out that the agricultural implements which can be notified under the
said entry have to be either manually operated or animal driven. In other words,
implements notified under this entry have to be manually operated or animal
driven to bring them within the scope of the entry. The earthen or plastic
containers in which plants are grown do not require manual operation and are not
animal driven. Such planters will not, therefore, be covered by the scope of
this notification.
4. It was also be clarified that a
planter as understood in agriculture is an implement used to sow seeds in the
earth and that such planters alone will be covered by the scope of this entry,
if they are manually operated or animal driven.
3.15 Cir.No. 24 T of 2005 Mumbai, dt.
18th August, 2005
Sub: Extension of date:-
1) Submission of closing stock Statement.
2) Filing of application in Form-107.
Closing Stock Statement
The date for
submitting the statement of closing stock of goods and capital assets as on the
31st March 2005, which was initially notified as 30th April 2005 was extended to
15th June 2005 by the circular at reference number (1) above and thereafter to
15th July 2005 by circular at reference No. (2) above and thereafter, to 16th
August 2005 by circular at reference No. (3) above. Due to unprecedented
rainfall and flood conditions in Maharashtra, the date was extended further to
15th September 2005.
2. However,
in the case of the dealers who are required to file monthly returns and who wish
to claim the set-off of closing stock as on 31st March, 2005 in the return for
the month of July 2005, the last date for submitting the closing stock statement
will be 25th of August 2005. But if the dealer does not wish to claim the
set-off of closing stock in the return for the month of July 2005, then in such
cases the last date for submission of closing stock statement will be 15th
September 2005.
3. In other
words, the set-off on the closing stock as on 31st March 2005 can be claimed
only after a closing stock statement in the prescribed form is filed with the
Department.
Filing of application in Form-107
4. The date
for submission of Form-107 was 15th June 2005 and was extended to 30th July 2005
by circular at reference (5) above for the dealers covered by paragraph 1.3 of
this office’s Trade circular 5T of 2005. Due to unprecedented rainfall and flood
conditions in Maharashtra, it is now decided to extend the date further to 15th
September 2005.
3.16 Circular No 25 T of 2005 Mumbai dated 24th
August 2005
Sub. : Filing of
returns for the month of July 2005.
The date of filing of return for the month of
July 2005 is 25th August 2005. Many representations have been received by the
State Government to extend this date due to unprecedented rainfall and flood
conditions in Maharashtra in the month of July and August 2005. Therefore, date
of filing of return for the month of July 2005 under Maharashtra Value Added Tax
Act, 2002; Central Sales Tax Act, 1956 and other Acts administered by the
Sales Tax Department is extended to 31st August 2005.
3.17 Trade Cir- 26 T of
2005 Mumbai, dt. 5th September 2005
Sub: Extension of date for Composition Scheme.
The State Government has announced different
types of Composition Schemes for certain categories of dealers. Every dealer who
wants to join the Composition Scheme is required under the scheme to apply by a
prescribed date. Earlier this date was extended up to 16th August 2005 by
Circular No.20T of 2005 dated 20th July 2005.
It has now been decided to extend the date for
making application under any of the Schemes to 30th September, 2005. Thus, a
dealer wishing to apply for Composition under any Composition Schemes may make
an application before the 30th September, 2005.
3.18 Trade Cir. 27T of 2005 Mumbai, dt
: 22-9-2005
Sub. :
Refund Payment orders under MVAT Act, 2002.
Under the Bombay Sales Tax Act, 1959, refunds
were granted in Form 34 in some parts of the State and in Form 34A in other
parts of the State including Mumbai. The Bombay Sales Tax Act, 1959 has since
been repealed. The Maharashtra Value Added Tax Act, 2002 has come into effect
from 1st April, 2005. A different type of refund payment order is prescribed
under the rules made under the new Act. However, a large number of refund
payment orders under the old Act are still in stock. It is, therefore decided to
use the refund cheques prescribed for the purposes of the old Act while granting
refunds under the new Act. The refund payment orders in Form 34 and in Form 34A
will be used as printed without any change or amendment. This arrangement will
continue till the stocks are exhausted.
3.19 Trade Cir. 28 T of 2005 Mumbai Dt
: 20-09-2005
Sub : Taxation of Medicines under the
Maharashtra Value Added Tax Act, 2002 (Mah. IX of 2005) Special provisions
regarding taxation of medicines.
Two Trade Circulars as above have been issued by
the Commissioner of Sales Tax on the subject of Taxation of Medicines under the
Maharashtra Value Added Tax Act, 2002. These circulars explain generally the
principles which may be adopted while collecting and paying taxes on medicines
covered by the Entry C-29. Para 4E of the second circular (dated 19.05.2005)
deals with set-off in respect of branch transfer, inter-State sales and exports.
It is stated in Para 4E [ii] that,
“As to branch transfer, the Rule 53 of the
Maharashtra Value Added Tax Rules, 2005 provides for a reduction of four per
cent of the purchase price from set-off. The applicable tax rate for medicines
is four per cent. In view of the nature of the scheme for taxation of medicines,
set-off will not be allowed on the branch transfers of medicines”
2. It has been represented to the
Commissioner of Sales Tax office that, as per Rule 53 of the Maharashtra Value
Added Tax Rules, 2005, reduction of 4% is provided for the purchase price
towards grant of set-off. Although tax is levied on MRP at the first stage of
sale in Maharashtra, the actual purchase price in the hands of the person
effecting the inter-State consignment transfer is bound to be less than the
price on which tax has been charged, at the time of the first sale. It has been
represented that in such circumstances it would be inequitable to disallow
set-off on inter-State consignment of medicines on the ground that the
applicable tax rate on medicine is four percent.
3. The question has been examined in this
office. It is now decided that, when tax has been paid at the time of the first
sale on the MRP of medicines and subsequently the medicines are sent on
inter-State consignment, the reduction of 4% would be effected only on the
actual purchase price of the dealer making the inter-State consignments. To give
an illustrative example, the MRP of a particular batch of medicine is Rs.100/-,
and tax has been paid at the rate of 4% on Rs.100/-; the wholesaler has actually
purchased the medicines at the price of Rs.80/-, and the medicines so purchased
are sent by way of consignment transfer to another State. In such a case, the
deduction of 4% would apply to the purchase price of Rs.80/- and the reduction
would accordingly amount to Rs.3.20. The dealer making the inter-State
consignment would, therefore, remain entitled to claim set-off of Rs.0.80/-,
i.e., the tax collected on MRP minus 4% on the purchase price of the consigner.
4. This clarification would apply
retrospectively with effect from 1st April 2005.
3.20 Trade Cir. No.29T of
2005 Mumbai Dt. 23-9-2005
Subject:
Clarification regarding entry “C-41 – Gypsum of all forms and descriptions”
The Schedule entry “C-41” reads as “Gypsum of all
forms and descriptions”
2. Queries were received on the point
whether the commodity “plaster of paris” would be covered by the scope of the
entry C-41. The querists have pointed out that plaster of paris is a hydrated
form of gypsum.
The condensed chemical dictionary states:
“Calcium Sulphate CaSO4 or CaSO4 2H2O, Occurs in
nature as anhydrite and in hydrated form as gypsum (plaster of paris)”
3. In Customs Tariff Act, 1975, plaster
of paris is covered under the heading 2520, i.e., for gypsum. The heading 2520
reads as follows –
“2520 – Gypsum; anhydrite; plasters (consisting
of calcined gypsum or calcium sulphate) whether or not coloured, with or without
small quantities of accelerators or retarders”
4. It is accordingly clarified that
plaster of paris would be adequately covered by the scope of the entry C-41
w.e.f. 1st April 2005.
3.21 Trade Cir.- 30 T
of 2005 Mumbai Dt : 23-9-2005
Sub : Disturbance caused by the unprecedented
flood – Certain reliefs.
Unprecedented flood and rains have visited not
only in Mumbai but many districts in Maharashtra in late July and early August 2005. Representations have been
received from a section of the trade regarding the problems faced by the dealers
in its wake in complying with the administrative requirements of the Maharashtra
Value Added Tax Act, 2002. In view of the requests received, the following
clarifications are issued:-
I] The first request is regarding
the set-off available on goods destroyed in flood.
It is
clarified that the set-off would be available on goods which had been earlier
purchased but were subsequently destroyed in flood. In order to substantiate
such claim, the dealers will have to obtain duplicate purchase invoices from the
suppliers.
II] The second
request is about those dealers who have filed their due returns before the flood
but the books of accounts and other supporting evidence has now been destroyed.
It is clarified that subject to the first
clarification, such returns will ordinarily be accepted. If, however,
information is received from other sources suggesting that the return is not
correct, then an independent inquiry may be made.
3.22 Circular No. 31 T of 2005
Mumbai, dt: 3-10-2005
Sub.: Premature
Repayment of the amount of deferred taxes by the Eligible Units at Net Present
Value. Maharashtra Value Added Tax Act of 2002.
Fourth Proviso to sub-section (4) of section 38
of the Bombay Sales Tax Act, 1959 (“The B.S.T. Act”) read with Rule 31D of the
Bombay Sales Tax Rules, 1959 (“The B.S.T. Rules”) contained a scheme of
pre-payment of deferred taxes at net present value (“NPV”) at option to be
exercised by the eligible units holding the entitlement certificates for the
sales tax incentives to be availed by way of deferral. The salient features of
the said scheme were explained to the trade by the Commissioner of Sales Tax by
the Trade Circular No.39T of 2002 dated 12-12-2002 and Trade Circular No.15T of
2003 dated 23.05.2003.
2. The similar scheme, of pre-payment of
deferred taxes, has been provided in the Maharashtra Value Added Tax Act, 2002
(“MVAT Act”) which is comprised in sub-section (2) of section 94 of the MVAT Act
read with rule 84 of the Maharashtra Value Added Tax Rules, 2005 (“MVAT Rules”).
It is clarified that the said scheme is no different from the scheme that was
provided in the B.S.T. Act, particularly on the aspect of percentage for
calculation of net present value.
3. Like rule 31D of the BST Rules, the
rule 84 of the MVAT Rules, prescribes the procedure for calculation of NPV for
the purpose of pre-payment of the amount of deferred taxes as provided by
sub-section (2) of section 94 of the MVAT Act. The rule 84 of the MVAT Rules,
contains the table similar to the table which was contained in Rule 31D of the
BST Rules. The said table has three columns namely; column no.(1) for “Serial
No”., column no. (2) for “Period in months between the date of actual payment
and the extended date of payment” and column no.(3) for “percentage”. The column
no.(1) has serial nos. starting from 1 to 325, each serial no with the same no.
of period in months between the date of actual payment and the extended date of
payment in the column no. (2). The column no.(3) has figures of percentage
corresponding to the no. in the column no.(2). For example, corresponding to the
serial no.1 is, one month as the pre-payment period corresponding to which is
the figure 99.1121 which is the percentage. This would mean that if an amount of
rupees 100 being the deferred taxes is decided to be pre-paid one month prior to
the extended date of payment then, the amount of rupees 99.11 would be the net
present value of rupees 100. It would be seen from the table that as the
pre-payment period mentioned in column no. (2) of the table goes up, the figure
of corresponding percentage goes down.
4. It is noticed from the table that the
figures of percentage in column no.(3) corresponding to the serial no. 164
onwards till the serial no. 325 have not been correctly mentioned in the English
version of the table. It is, therefore, advised that the dealers, opting to
pre-pay the deferred taxes at net present value as per the scheme, should refer
to the table as provided in rule 31D of the BST Rules, for the purpose of
calculation of NPV if the pre-payment period involved is any period from 164
months onwards till 325 months. A table showing the correct figures of
percentage is enclosed with the Circular.
4. Circular other than VAT:
4.1 Cir. No. 16 T of 2005 dt.
8-8-2005
Sub:
Release of Bank Guarantees or securities in the form of National Saving
Certificate.
The Bank
Guarantees or securities in the form of National Saving Certificates are
accepted for the grant of Declarations, Licences, Authorisations, Recognitions
or Permit etc. by the department and are released after the expiry of the period
for which the Bank Guarantees or securities in the form of National Saving
Certificates are furnished. It is noticed that in many cases the Bank Guarantees
or securities in the form of National Saving Certificates are not released even
after the stipulated period. The amounts involved therein are unnecessarily held
over by the Bank or Postal Department even after the expiry of the guarantee
period, causing inconvenience to the dealers.
2.
It appears that the delay in releasing of the Bank Guarantees or securities in
the form of National Saving Certificate is on account of the fact that the
assessments are not timely completed by the Sales Tax Officers. It is,
therefore, directed that the assessments of dealers furnishing the Bank
Guarantees or securities in the form of National Saving Certificate should be
completed for a period ending on the last day of the year following the year in
which the Bank Guarantees or Securities are deposited, on priority basis, and
definitely before the expiry of the guarantee period.
3. To exercise proper control on the
timely disposal of the assessments of such cases, it is directed that Assistant
Commissioners/ Deputy Commissioners (Adm) should maintain check-list of such
cases Sales Tax Officer-wise and watch the progress of the work from time to
time and issue necessary instructions to the Sales Tax Officers, keeping in view
the dates of the expiry of the Bank Guarantees or securities in the form of
National Saving Certificate.
4. Further, Deputy Commissioners (Adm)
and Assistant Commissioners (Adm) keeping Bank Guarantees or securities in the
form of National Saving Certificate in their Custody, should ensure that actions
of recovery or release of the Bank Guarantees or securities in the form of
National Saving Certificate, as the case may be, are not delayed for completion
of assessment at the end of Sales Tax Officers. It is hereby made abundantly
clear that Bank Guarantees or National Savings Certificates should be released
immediately, within 30 days, after the expiry of the period for which they are
kept.
4.2 Circular No 22 T of 2005 Dt.
28-9-2005.
Sub: Amendment to
Central Sales Tax Act, 1956 (Act No. 74 of 1956) by Finance Bill 2002 (No.20 of
2002).
The Union Government has carried out certain
amendments to the Central Sales Tax Act, 1956 by Finance Bill 2002 (No. 20 of
2002). The said amendments were made effective from 11th May 2002. As the
amendments were made effective immediately after receiving the assent of the
President of India, a proposal was sent to the State Government that the
amendments whereby liability is cast on the dealer should be made effective from
1st June 2002 and administrative relief be granted for the period from 11th May
2002 to 31st May 2002. The same was intimated to trade by circular and
advertisement referred to above.
2. The proposal for administrative relief
is considered but not accepted by the State Government. In view of this, the
dealers are hereby informed that there is no change in the date of effect of the
amendments to the Central Sales Tax Act, 1956 by Finance Bill 2002. That is to
say, the said amendments will be effective from 11th May 2002.
4.3 Circular No. 23 T/2005 dt.
30-9-2005
Sub:
Annual Return for the year 2004-2005 Extension of date.
The last date for filing of the annual return for
the year 2004-2005 as per Rule 22(4) of the B.S.T. Rules, 1959 was 30-9-2005.
However, there have been a number of representations from trade as well as from
the STP Association requesting for extension of the date, in the wake of the
July 2005 floods. Considering the requests made by them , the last date is
hereby extended upto 15-11-2005.
4.4 Circular No 24 T of 2005
Sub: VAT
on Iron and Steel.
Value Added Tax was introduced for the period
1-10-2002 to 30-4-2003 on iron and steel covered by the Schedule Entry B-6 under
Bombay Sales Tax Act, 1959. By Maharashtra Act No. XIII of 2004, dated 29-6-2004, sub-section (i) of section 7
was amended and the levy of Value Added Tax on iron and steel was removed with
effect from 1-5-2003. The same effect was earlier achieved by issuing
notification No.STA-2003/CR-66/Taxatin-2 dt. 8th July 2003. A circular to
clarify the issue was also issued on 10-7-2003.
2. Doubts have been expressed about the
validity of the notification and circular. It is hereby made clear that despite
the amendments, the instructions contained in the said circular are still valid
and should be followed scrupulously.
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