Clarifications Regarding Single Stage Taxation by Excise and Taxation Department




Reference Notification No. S.O.116/P.A8/2005/S.8/2005/S.8/2013 and NO S.O 117/P.A.8/2005/S.8/2013 dated 13th December, 2013

In light of the above notifications we are receiving queries from various dealers and lawyers. In response to this, following clarifications are being issued:

1.     These notifications have been issued under the powers vested in Government under section 8(3) of VAT Act, 2005 to modify the rates of tax.

2.     These notifications have nothing to do with newly introduced section 8-C of Punjab VAT act, 2005 which has provisions for introduction of optional scheme.

3.     In light of these notifications any transactions in the hands of manufacturer/first importer will be taxed at the rates mentioned against these commodities. CST provisions will be applicable on the Manufacturer/First Importer as earlier.

4.     In light of these notifications any transactions in the hands of subsequent dealers will be tax free. So, if any subsequent dealer makes any inter-state sale of the notified goods, the tax liability will be nil and at the same time ITC available will also be nil.

5.     Some lawyers have pointed out that some of the items notified now like tea, bread etc. were earlier taxed on the rates mentioned in Schedule –B or were tax free and covered under Schedule A. But, now after this notification, their rate seems to have been substantially increased to 14.5%. In this context, it is clarified that the above mentioned notifications cover only those items which were in Schedule-F earlier (13% rate of tax). In case any item was earlier covered in Schedule-B or Schedule A, then that item continues to remain in Schedule-B or Schedule A as the case may be.

6.     Moreover, the words mentioned in the notification – the words “such as”, “like” and “etc.” have been used for further addition of goods in future. This notification is applicable only on the goods specifically notified therein.

7.     10% surcharge is applicable in addition to the tax rates mentioned in these notifications.

8.     Some of the dealers, trade associations, bar council members etc have requested that they need time to change their SAP / ERP systems and will

not be able to print computerized retail invoices at such a short notice. Such dealers are given the time of 1 month to change their systems. But 1st January onwards all the Tax invoices must be stamped as given below:


The commodities if any taxed at 15.95% (14.5% + 10% surcharge thereon) are under single stage taxation regime. There will be no ITC available to the subsequent dealer i.e wholesalers /distributors and retailers on these commodities.

ITC available to the tune of Rs. ___________________ to the subsequent dealer.



The Subsequent dealer i.e Wholesalers/Distributors and retailers will also mention on his invoice as below:
The commodities at 15.95% (14.5% + 10% surcharge thereon) are taxed at

Manufacturer/First Importer’s Stage and tax free under single stage taxation regime. There will be no ITC available to the subsequent dealer on these commodities.

ITC available to the tune of Rs. ___________________ to the subsequent dealer.



9.     The dealers at the subsequent stages after Manufacturer/First Importer have to declare their stock as on 31st December, 2013. The dealers at the subsequent stages after Manufacturer/First Importer will continue to pay the tax according to the provisions of Punjab VAT Act, 2005 on this stock

until completely sold or disposed off. The stock purchased by the dealers at the subsequent stages after Manufacturer/First Importer on or after 1st January, 2014, will be tax free at the subsequent stages after Manufacturer/First Importer’s Stage.

10.        In Serial 19 of Schedule-E, Only Branded items will be taxable under Schedule-E @ 15.95%.

11.  In Serial No. 20 of Schedule-E and 91 of Schedule-A, word or shall be read as and.







Dated:                                                                                                                       Sd/-

Sh. Jaspal Garg

DETC (VAT)


Declaration of Stock

I, ___________________________, Proprietor/Partner/Managing Director/Karta/ Authorized Signatory ____________________ of M/s

___________________________________________________,            Address

___________________________________________________________________

______________________, holding TIN No. __________________, registered under Punjab VAT Act, 2005 since ________________, trading in

________________________________________________________, hereby, declare stock lying on my premises as on 31st December, 2013 as follows:



Commodities
Quantity
Existing Rate
New  Rate  of
Value
Purchased


of tax
tax

From


14.30%
15.95%




14.30%
15.95%




14.30%
15.95%




14.30%
15.95%




14.30%
15.95%




14.30%
15.95%




22.55%
24.75%





I understand that I shall be liable to pay tax on the value addition on the above mentioned stock as per the provisions of Punjab VAT Act, 2005 at the rate of tax prevalent before 1st January, 2014 as and when I sell/dispose this stock.




Dated: 31st December, 2013                                         Signature
Name

Address
TIN No.

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