Some Important recent orders u/s 85 of PVAT Act 2005

0 comments Wednesday, February 23, 2011
Section 85 of the PVAT Act empowers the Commissioner under the Act to determine any disputed question as may arise otherwise than  in proceedings before a Court or before the commencement of assessment of a person under section 29. Here some recent important orders of Commissioner u/s 85 of PVAT Act are being shared here:

Order dated 25/10/2010 regarding determination of rates of tax on certain goods

Name of the Applicant              Sh. Naginder Mohan Sharma,
                                              S/o Sh. Prithvi Nath Sharma,
                                              R/o 41, Hardev Nagar, Street No.10
                                              Kapurthala Road,Jalandhar.
Question for determination: Clarification regarding rate of tax applicable on the goods mentioned below:

                     1.         PVC Sole for football Shoe
1.                RBR Sole for football Shoe
2.                Jogger Sole
3.                Running Spikes Plate
4.                PVC Sole for cricket Shoe
5.                RBR Sole for Cricket Shoe
6.                PVC Sole for Badminton Shoe
7.                RBR Sole Badminton Shoe
8.                Phylone Sole
9.                PVC Sole football Stud
10.           Football Stud Sole
11.           Insole
Determination: The above items are not covered under Schedule-B. They do not qualify to be raw material either and therefore are unclassified goods taxable @ 12.5% and surcharge leviable thereon under section 8-B of the PVAT Act, 2005.

Order dt 25/10/2010 on section 13(3) of PVAT Act and Rule 20 of PVAT Rules:
Name of the Applicant              M/s SGS International,
                                              741-742 , Phase-VIII, Focal Point 

Relevant section and rule:
“Section 13 (3)    Where a taxable person sends any goods as such or after being partially processed for further processing on job work basis, he shall debit the ITC by  four percent of the value of such goods. If such goods after processing are received back by such person, the ITC debited at the time of despatch, shall be restored. Such person shall, however, be required to produce proper evidence in the shape of records, challans or memos or any other document evidencing receipt of such goods, whenever asked for.”   

Rule 20 of PVAT Rules:Eligibility of input tax credit on job work.--Input tax credit shall be allowed, if any taxable goods as such or after being partially processed, are sent by a manufacturer, registered under the Act to a job worker for further processing, testing,. repair, reconditioning  or any other purpose , and it is established from the challan or relevant documents produced by the taxable person concerned that the goods in question have been received back by him within a period of ninety days from the date of dispatch to the job worker.”

Question for Determination:
1.                : Whether Input tax credit debited on transfer of goods for job work  can be restored if the goods are received back after a period of ninety days which is against the rule 20 of PVAT Act, 2005.

2.                Whether in such cases penalty can be imposed under section 60 of the PVAT Act, 2005, if the taxable goods are covered by proper documents and are received back after 90 days.
1. The amount of input tax credit debited in respect of taxable goods sent for job work and received back after a period of 90 days can be restored if the taxable person is able to prove with the help of documents that the same goods  are received back. It can be accepted as a special case. The dealer should be able to prove / produce sufficient reasons for delay in getting goods back beyond the prescribed limit of 90 days.  This delay should be of only few days under special extra ordinary circumstances.
2. If the taxable goods after job work are received back after a period of 90 days the provision of Section 60 of PVAT Act  are to be revoked

Order dated 26/11/2010 on rate applicable on Battery operated vehicles
Name of the Applicant              M/s Sewaco Motors,
                                              25-BDA Complex, Near KMV College
                                              Pathankot Chowk,  

Question for determination: “Whether  battery operated vehicles fall under entry no, 94 of Schedule-B of the PVAT Act, 2005 relating  to renewable energy devices and spare parts”

Determination:  The battery operated vehicles do not fall under entry no 94 of Schedule-B and are taxable as unclassified item falling under Schedule-F of the PVAT Act, 2005 and is therefore taxable @ 12.5% in addition to surcharge leviable  thereon.  The question is determined accordingly.

Order dated 29/12/2010 regarding entry at serial no. 133 of Schedule-B of PVAT Act, 2005
Name of the Applicant              M/s  Promark Techsolutions Pvt. Ltd.,
                                              Morinda Bye-pass, Ludhiana Highway,
                                              Village Badi Madauli,
                                              Morinda (Ropar)

Relevant entry: 133.  Writing Insturments, geometry boxes, colour boxes, brushes for colour boxes, crayons pencil, pencil sharpeners and erasers.

Question for determination: “ Whether Black Boards being writing instruments, are covered in Schedule-B appended to the PVAT Act, 2005 and is taxable @ 5% or fall in Schedule-F and liable to tax @ 12.5%”

Determination: the entry no. 42 of Schedule-B of the repealed PGST Act, 1948 is different  from entry no. 133 of Schedule-B attached to the PVAT Act, 2005. The Black Board cannot be treated as writing instruments rather it is a medium to write on and not an instrument for writing. Hence, the Black Board falls under Schedule-F of PVAT Act, 2005 and is taxable @ 12.5%.

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