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.
The tax will be payable on such goods by the first importer and the manufacturer only. At subsequent stages when such goods are sold by wholeseller, distributor or retailler, the same will be sold as tax free.
That means no tax will be paid on the value addition of such goods at subsequent stages. System of VAT is a multiple point of taxation. Single point of taxation is inconsistent with the VAT system and also the preamble of the Punjab VAT Act, 2005 which runs as under:
" An Act to provide for the levy and collection of value added tax and turnover tax on the sales or purchase of goods and for the matters connected therewith and incidental thereto, and for the repeal of the Punjab General Sales Tax Act, 1948."
Inspite of the abovesaid amendment being in contradiction with the preamble of the said Act, in my view the State Government is very much competent and within its right under Entry 54 of the State List of the seventh schedule to the Constitution of India, to levy tax on the single point of sales within State and make subsequent stages tax free.
The sigh of relief in the said amendment is that no single point of tax has been levied on goods which could have been used as raw material for any industry, otherwise it could have resulted in tax cascading.
The special rates of tax @14.5% and 22.5% have been notified for such goods on which tax will be payable at first stage. It should be noted that surcharge @ 10% u/s 8-B will be seperately leviable on such goods, thus making the rate of tax from 14.5% to 15.95% and from 22.5% to 24.75%.
The said amendments will be applicable w.e.f 01-January-2014
The relevant notifications are as follows:
The tax will be payable on such goods by the first importer and the manufacturer only. At subsequent stages when such goods are sold by wholeseller, distributor or retailler, the same will be sold as tax free.
That means no tax will be paid on the value addition of such goods at subsequent stages. System of VAT is a multiple point of taxation. Single point of taxation is inconsistent with the VAT system and also the preamble of the Punjab VAT Act, 2005 which runs as under:
" An Act to provide for the levy and collection of value added tax and turnover tax on the sales or purchase of goods and for the matters connected therewith and incidental thereto, and for the repeal of the Punjab General Sales Tax Act, 1948."
Inspite of the abovesaid amendment being in contradiction with the preamble of the said Act, in my view the State Government is very much competent and within its right under Entry 54 of the State List of the seventh schedule to the Constitution of India, to levy tax on the single point of sales within State and make subsequent stages tax free.
The sigh of relief in the said amendment is that no single point of tax has been levied on goods which could have been used as raw material for any industry, otherwise it could have resulted in tax cascading.
The special rates of tax @14.5% and 22.5% have been notified for such goods on which tax will be payable at first stage. It should be noted that surcharge @ 10% u/s 8-B will be seperately leviable on such goods, thus making the rate of tax from 14.5% to 15.95% and from 22.5% to 24.75%.
The said amendments will be applicable w.e.f 01-January-2014
The relevant notifications are as follows:
GOVERNMENT
OF PUNJAB
DEPARTMENT
OF EXCISE & TAXATION
(EXCISE
AND TAXATION-II BRANCH)
NOTIFICATION
The
13th December, 2013
S.O.116/P.A8/2005/S.8/2005/S.8/2013
– Whereas the State Government is satisfied that circumstances exist, which
render it necessary to take immediate action in public interest;
Now,
therefore, in exercise of the powers conferred by sub section (3) of section 8
of the Punjab Value Added Tax Act, 2005 (Punjab Act No. 8 of 2005) and all
other powers enabling him in this behalf, the Governor of Punjab is pleased to
make the following amendments in Schedule ‘A’, appended to the said Act, with
effect from 1st January, 2014, by dispensing with the condition of previous
notice, namely:-
AMENDMENT
In
the said Schedule ‘A’, after serial No. 85, the following serial No. 86 to 91
and the entries relating thereto, shall be added. These commodities shall be
tax free at the wholesaler or distributor or retailer stage provided that tax has
already been paid at the first point of sale i.e manufacturer or first
importer’s stage.
Sr. No
|
Commodity Name
|
86
|
All types of
Televisions, Refrigerators, Washing Machines, Microwave
|
ovens, Oven Toaster
Grillers (OTGs), Home Theatres, and Air
|
|
Conditioners
|
|
87
|
Kitchen Appliances
like sandwich makers, tea/coffee makers, juicer mixer
|
grinders (JMGs),
hand blenders, electric rice cookers, electric tandoors,
|
|
induction cook tops, electric
chimneys, electric fryers
|
|
88
|
Cold Drinks
(Aerated Drinks)
|
89
|
All types of
personal care products such as deodorants, shaving products,
|
beauty soaps,
shampoos, hair oil, conditioners, serums, hair care
|
|
products, tooth pastes, hand wash, body wash, beauty products, hair
|
|
gels, bathing gels,
talcum powders, creams, anti-persiprants, petroleum
|
|
jellies, baby care products, skin
care lotions and after shaving lotion
|
|
90
|
All types of soaps
and detergents such as washing bars and soaps, fabric
|
softeners, bleach,
gentle wash, dish wash, color care, Neel
|
91
All types of branded or packaged food
products such as chips, wafers, chocolates, toffees, ice creams, Corn Flacks,
pasta, macroni, biscuits, frozen desserts, frozen products, meal makers,
instant soups , instant noodles, ready to eat products, namkeens, custard
powder, snacks, bakery products, baby foods etc.
D.P. REDDY,
Financial
Commissioner Taxation and
Secretary to
Government of Punjab,
Department
of Excise and Taxation
GOVERNMENT
OF PUNJAB
DEPARTMENT
OF EXCISE & TAXATION
(EXCISE
AND TAXATION-II BRANCH)
NOTIFICATION
The 13th
December, 2013
NO S.O 117/P.A.8/2005/S.8/2013
– Whereas the State
Government
is satisfied that circumstances exist, which render it necessary to take immediate
action in public interest;
Now, therefore, in exercise of the powers conferred by
sub
section (3) of section 8 of the Punjab Value Added Tax Act, 2005 (Punjab Act No. 8 of 2005) and all other powers enabling him in this behalf, the Governor of Punjab is pleased
to make the following amendments in Schedule ‘E’, appended to the said Act, with effect from
1st January, 2014, by dispensing with the condition of previous notice, namely:-
AMENDMENT
In the said Schedule ‘E’, after serial No. 14, the
following serial No. 15 to 20 and the entries relating thereto,
shall be added. These commodities shall be
taxable
at the first point of sale i.e manufacturer or first importer’s
stage, at the rates
specified against these entries in the Table
given below, namely:-
Sr.
No
|
Commodity
Name
|
Rate of Tax
|
15
|
All types of Televisions, Refrigerators,
Washing Machines,
Microwave ovens, Oven Toaster
Grillers (OTGs), Home
Theatres,
and Air Conditioners
|
14.5 per cent
|
16
|
Kitchen Appliances like sandwich
makers, tea/coffee makers, juicer mixer
grinders (JMGs), hand blenders, electric
rice cookers,
electric tandoors, induction cook
tops, electric
chimneys, electric
Fryers
|
14.5 per cent
|
17
|
Cold Drinks
(Aerated Drinks)
|
22.5 per cent
|
18
|
All types of personal care products such as deodorants, shaving
products, beauty soaps, shampoos, hair oil, conditioners,
serums,
hair care products,
tooth pastes, hand wash, body wash, beauty
products, hair gels, bathing gels, talcum powders, creams, anti-
persiprants, petroleum
jellies, baby care products, skin care lotions and after shaving lotion
|
14.5 per cent
|
19
|
All types of soaps and detergents such as washing bars and
soaps,
fabric softeners, bleach, gentle wash, dish wash, color care, Neel
|
14.5 per cent
|
20
|
All types of branded or packaged food products such as chips,
wafers, chocolates, toffees, ice creams, Corn
Flacks, pasta,
macroni, biscuits, frozen desserts,
frozen products, meal makers,
instant soups, instant noodles, ready to eat products, namkeens, custard powder, snacks, bakery products,
baby foods etc.
|
14.5 per cent
|
D.P. REDDY,
Financial Commissioner Taxation and Secretary to Government of Punjab, Department of Excise and Taxation.
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