0 comments Thursday, February 27, 2014Read On
I had prepeared representation on behalf of Iron and steel industry in Punjab, which has been filed with the Punjab Government for withdrawl of latest notification dated 01.02.2014 regarding restriction of input tax credit on iron and steel goods to only two stages and also on closing stock as existing on the date of reduction of tax from 4.95% to 2.75% on iron and steel goods.
The representation covers the difficulties faced by the industry due to the above notification and some light has also been thrown on the constitutional validity of amendment covered under the said notification.
0 comments Sunday, February 16, 2014Read On
Recently Rule 21(8) of Punjab VAT Rules 2005 was introduced which provided that where some goods as input or output are lying in stock of a taxable person and where rate of tax is reduced from a particular date, then from that date, input tax credit shall be admissible to the taxable person on sale of goods lying in stock or on using the goods as input for manufacturing taxable goods, at the reduced rate.
0 comments Friday, February 14, 2014Read On
Punjab Government u/s 8-A of the Punjab VAT Act, 2005 has legislated Punjab Small Traders Rahat Scheme, 2014. This scheme has been legislated for the retailers of small towns which falls in the Class-II and Class-III categories notified seperately for this purpose.
0 comments Wednesday, February 12, 2014Read On
0 comments Tuesday, February 11, 2014Read On
Section 41(1) of the Act would apply in a case where there has been remission or cessation of liability during the year under consideration subject to the conditions contained in the statute being fulfilled. Additionally, such cessation or remission has to be during the previous year relevant to the assessment year under consideration.
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Circular No.. 04/2014, Dated : February 10, 2014
Subject – Non-Filing of ITR-V in returns with refund claims-relaxation of time- limit for filing ITR-V and processing of such returns -regarding.
0 comments Sunday, February 9, 2014Read On
Excise and taxation inspectors (ETIs) would not be allowed to check commercial premises of traders in at least 71 towns of Punjab after February 13 as the state excise and taxation department is launching a new scheme under which traders would have an option to pay value added tax (VAT) once a year in proportion to their annual income.
Supreme Court stays section 62(5) of Punjab VAT Act, 2005-No need to pre-deposit 25% for filing appeal0 comments Tuesday, February 4, 2014
In a very important case namely Dishnet Wireless Ltd vs The Commercial Tax Officer SLP No. 37727/2013 and in WP(c) No. 69 of 2014 namely Amrit Banaspati Limited vs State of Punjab Supreme Court has granted stay on the operation and implementation of section 62(5) of Punjab VAT Act, 2005.
0 comments Saturday, February 1, 2014Read On
In a public notice issued today on the website of the Department it now has been clarified that reduced rate of tax on iron and steel goods at the rate of 2.5% will now be applicable w.e.f 01.02.2014.
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PUNJAB GOVT. GAZ. (EXTRA), JANUARY 29, 2014 195
(MAGHA 9, 1935 SAKA)
GOVERNMENT OF PUNJAB
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Punjab Government has reduced VAT on milk when purchased for manufacturing taxable goods and on wheat when purchased for processing, from 6.05% to 3.3% (after adding surcharge of 10%). Wheat not to be used for processing purpose will continue to attract VAT @ 6.05%. Relevant notification is produced herebelow:
0 comments Friday, January 31, 2014Read On
Punjab Government has notified reduced rate of tax on Iron and steel goods as defined u/s 14 (iv) of Central Sales Tax Act, 1961 from 4.5% to 2.5% except on Non-CENVAT paid scrap.
Non-CENVAT paid scrap has been made taxable at the rate of 1% only. This change has been made effective from 25.01.2014.
0 comments Tuesday, January 21, 2014Read On
Having hiked the value added tax (VAT) on cigarettes last year to curb sales, the Punjab cabinet Monday decided to reverse the decision and reduced the tax on them.
Under the proposal approved by the cabinet at its meeting held here Monday with Chief Minister Parkash Singh Badal in the chair, VAT on cigarettes was reduced from 50 to 20.5 percent.
0 comments Sunday, January 5, 2014Read On
Madras High Court in a very important case namely USA Agencies vs The Commercial Tax Officer has held that input tax credit under system of VAT is merely a concession granted by the Legislature under the sales tax law, therefore the provisions relating to such concession must be strictly construed. In this Judgement the Madras High Court very well explained the concept of input tax credit and also the scheme of the VAT system.
0 comments Saturday, January 4, 2014Read On
As we all know single stage taxation has been introduced on certain items under the Punjab VAT Act, 2005, whereby the goods notified for such purpose will be taxed at the first stage of their sale in Punjab and thereafter at all subsequent stages such goods will be sold as tax free. This system is applicable from 01.01.2014.
0 comments Monday, December 30, 2013Read On
0 comments Friday, December 27, 2013Read On
DEPARTMENT OF EXCISE AND TAXATION
(EXCISE AND TAXATION-II BRANCH)
Dated: 20th December, 2013
Whereas with a view to bring in greater transparency in the discharge of tax liabilities by a taxable person under the Punjab Value Added Tax Act, 2005 (Punjab Act No.8 of 2005), it is considered necessary so to do, now, therefore, in exercise of the powers conferred by section 29-A of the aforesaid Act and all other powers enabling him in this behalf, the Governor of Punjab is pleased to notify the scheme for settlement of unpaid tax, namely:-
0 comments Thursday, December 26, 2013Read On
In this article the implications of a latest amendment in the Punjab VAT Act, 2005 are analysed, whereby system of single point of taxation has been introduced in respect of certain goods by two notifications dated 13.12.2013, applicable w.e.f 01-01-2014.
By notification no. S.O.116/P.A8/2005/S.8/2005/S.8/2013 dated 13-12-2013 certain goods have been made tax free and the pre-condition for such goods to become tax free is that tax has already been paid at the first point of sale i.e manufacturer or first importer’s stage.
By notification No. S.O 117/P.A.8/2005/S.8/2013 dated 13-12-2013 the same goods which have been made tax free, have been made taxable at special rates of 14.5% and 22.5% at the first point of sale of such goods i.e. first manufacturer or first importer's stage.
Single point of taxation is not an optional levy on MRP under newly added section 8-C: During past few days many people have raised query whether such levy of tax at the first stage of sale is a levy under newly added section 8-C which purposes to levy an optional tax on the MRP of certain goods whereby subsequent sales will be exempted from tax.
It should be noted that the above levy on the first stage is not a levy on the MRP of the goods and nor the notification has been issued u/s 8-C, rather the above notifications have been issued u/s 8(3) of PVAT Act, which means that the above said levy on the first point of sale is mandatory in respect of the all the taxable persons and the levy on the first stage is not an optional levy on MRP under newly added section 8-C of Punjab VAT Act, 2005.
Tax implications of Stock existing as on 31.12.2013: Another question which frequently coming into everybody's mind is that what will be the status of the stock of such goods lying on 31-12-2013 which have been made taxable at the first stage of sales in the above notification .
To find out answer to the above question, one will have to answer certain questions.
First question: whether the said notification No. 116 while imposing the condition of tax being paid at the first point of sale for making such goods as tax free, refers to the tax paid on the first point of sale payable at the rates as mentioned in the later notification No. 117 or tax paid on first point of sales at any rate as existing before 31-12-2013.
The answer to the above question has not been given in any of the notifications no. 116 or 117. In the absence of any clarification, as per the rule of strict construction, it should be presumed that notification is referring to tax at any rate i.e rate existing before 31-12-2013 and also after 31-12-2013.
Second question: Thus going by above interpretation, the next question is whether stock of such goods as being made taxable at first point of sale in the above said notifications, as existing on 31-12-2013, whether have suffered tax at first stage of sale?
Before the above said notifications no. 116 and 117, the goods notified therein suffered tax at all stages including the first stage of sales, as per the multiple point of taxation system of VAT.
Therefore the stock of such goods as existing on 31-12-2013, have definately suffered tax on the first stage of sales, if they were purchased from within the State of Punjab at a stage later than the first stage of sales, thus once the goods have suffered tax at the first stage of sales, such tax at first stage must also have been paid either by cash or by adjustment of credit of tax paid on the inputs.
Thus concluding, the stock of such goods (which have been made taxable at first stage of sale), as existing on 31-12-2013 should also be treated as tax free after 01-01-2014 as per notification No. 116, (if the same were purchased at a stage later than the first stage of sales in Punjab) as the condition of tax being paid at the first stage of sales stands fulfilled in case of goods remaining in stock on 31-12-2013.
In case if the stock of such goods as existing on 31-12-2013 includes goods purchased from outside the State of Punjab by the owner of such stock, then such goods will become taxable w.e.f 01.01.2014 as the same would be sold at the first stage of sales.
The further question is whether dealers should bifurcate their stock of such goods into the goods which would be taxable at first stage and which would be tax free, of their own only as no stock declaration to that effect has been asked for.
Whether any reversals are required to be made on the stock as on 31.12.2013-Role of Rule 21(4) of Punjab VAT Rules, 2005: Rule 21(4) of Punjab VAT Rules, 2005 provides that where some goods as input or output are lying in the stock of a taxable person and where such goods become tax free from a particular date, then from that date, no input tax credit shall be admissible to the taxable person on the sale of such goods lying in the stock or on using the goods as input for making such tax free goods.
Thus the input tax credit if any standing on the stock of such goods which have been made taxable at first stage of sales and on which tax at the first stage has been paid, would have to be reversed and no input tax credit would be available on the sales of such goods w.e.f. 01.01.2014.
There may be some cases where the stock of such goods exists on 31.12.2013 but no corresponding ITC is standing in the books of a dealer, due to the fact that ITC on such stock of goods has been already utilised against other output tax liability by such dealer.
In such case whether such dealer should reverse the Input tax credit on the stock of such goods on which tax has already been paid at first stage of sales, is a question to be asked, because if the input tax credit on such goods have been already utilised, that would mean that tax paid on the previous stages of purchase such goods has been realised by the such owner of the stock.
No Declaration form prescribed for the first stage dealer: The person who has sold the goods at first stage of sales w.e.f 01.01.2014 and paid the tax on it, no declaration form has been prescribed for such person, declaring that the tax has been paid at the first stage of sales.
In the absence of such a form it would be difficult for the third and fourth stage dealers to prove that tax on first stage of sales has been paid and it may also lead to tax evasion.
In nut shell more clarifications are required from the Excise and Taxation Department to address the above issues before implementing the single point of taxation system.
No tax deduction on labour and service part of works contract under Punjab VAT-Commissioner clarifies0 comments Sunday, December 22, 2013
In an application u/s 85 of Punjab VAT Act, 2005 moved by me on behalf of my client, it has been held by the Excise and Taxation Commissioner, Punjab on 04-12-2013 that Judgement of Punjab & Haryana High Court in CWP 14797 of 2010 Larsen and Toubro vs State of Haryana is binding on all concerned works contractors.
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Punjab Government has surprisingly introduced single stage tax system under the Punjab VAT Act, 2005. Punjab Government has notified certain goods, most of which are consumable goods, on which tax under Punjab VAT Act has been levied only at the first stage of its sale.
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