SC: Mobile charger is an accessory of mobile phone and not its integral part; leviable to VAT at 12.5%

1 comments Thursday, December 25, 2014
Where assessee was selling mobile phone with battery charger in same packing, it did not charge any separate amount for battery charger from customers and was charging only for handset; battery charger was an accessory to cell phone and was not a part of it, thus, liable to VAT at general rate of 12.5 %.
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Period of holding of flat to be counted from date of allotment letter and not from date of possession

0 comments Friday, November 14, 2014
Law Point settled: Period of holding of a flat for the purpose of calculating capital gains, is to be reckoned from the date of allotment letter and not from the date of possession
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Punjab & Haryana High Court stays passing of final orders in assessment cases of year 06-07, 07-08 and 08-09

0 comments Tuesday, November 11, 2014
Punjab & Haryana High Court has stayed the passing of final orders in assessment cases of years 2006-07, 2007-08 and 2008-09 under Punjab VAT Act, 2005 in the case of M/s ABC Ltd vs State of Punjab. The said company had challenged the vires of the amendment in section 29 of Punjab VAT Act, 2005 whereby the limitation period of all the assessment cases including that of 2006-07, 2007-08 and 2008-09 was extended from three years to six years. For the assessment of year 2006-07 the time limit was extended till 20th November, 2014.
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Amendment in assessment under Punjab VAT Act, 2005

0 comments Sunday, November 9, 2014
Now a days It is seen that the Excise and Taxation Department, Punjab has started issuing notices for amendment in assessment in many cases. These notices are being issued ussualy on the basis of audit objections received from State CAG or sometimes on the ground that some of the law points were  misinterpreted by the predecessor of the assessing officer, while framing original assessment. 
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Due date of Efling of Punjab VAT returns of Q2 of year 2014-15 extended to 03.11.2014

0 comments Thursday, October 30, 2014
Public Notice

Kind Attention: Dealers/Lawyers/Chartered Accountants/Other Stakeholders

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Dealer cannot be denied benefit due to cancellation of R.C. of other dealer, unless the same is published in official gazette

0 comments Sunday, October 19, 2014
Punjab & Haryana High Court in an older case namely Arjan Radio House vs Assessing Authority had held that a person's registration certificate shall be deemed to have been cancelled w.e.f date of publication of the factum of cancellation in the official Gazette as a busy seller cannot be supposed to know whether the registration certificate of a purchasing dealer has been cancelled or not unless he can be fixed with the knowledge of this fact.
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Justice A. N. Jindal to be next Chairman of Punjab VAT Tribunal-long wait is over

0 comments Wednesday, October 15, 2014
Justice AN Jindal (retd), who had given a clean chit to Shiromani Akali Dal minister Sikandar Singh Maluka in the alleged multi-crore scam of government school books, is set to become the chairman of Punjab Value Added Tax (VAT) Tribunal.
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Supreme Court clarifies general principles concerning retrospectivity in laws

0 comments Sunday, October 5, 2014
The Hon'ble Supreme Court has very well explained general rules relating to retrospective laws in a recent landmark case namely CIT vs Vatika Township (P) Ltd. Civil Appeal No. 1160 of 2007 dt. 15.09.2014. In this case the primary issue was whether section 113 of Income Tax Act, 1961, which levied surcharge on tax assessed in block assessments, is retrospective in nature or not.
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No penalty can be levied merely on the basis of provisional assessment

0 comments Friday, October 3, 2014
Rajasthan High Court in a very important case namely ACTO vs Jain Hardware Stores has held that no penalty can be levied in the provisional assessment as for leving penalty definite findings and conclusions and many things have to be proved, therefore penalty cannot be levied merely on the basis of provisional assessment.
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Representation prepared on behalf of Jalandhar Sales Tax Bar on the issue of retention of ITC on closing stock

0 comments Sunday, September 28, 2014
I along with the President of Jalandhar Taxation Bar  have prepared and written a representation on behalf of Jalandhar Taxation Bar submitted to AETC, Jalandhar II, DETC, Jalandhar Division, ETC, Punjab and Additional ETC, Punjab. This representation is mainly on the issue of retention of ITC on closing stock in case of exporters by the Designated Officers at Jalandhar relying upon section 18(2) of Punjab VAT Act, 2005.
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CAs/CSs are not capable of arguing/ deciding Substantial Questions Of Law

0 comments Thursday, September 25, 2014
The Full Bench of the Supreme Court had to consider whether the National Tax Tribunals Act, 2005, which sought to take away the jurisdiction of the High Courts in tax matters was constitutional. The Full Bench has struck down the entire Act as being unconstitutional on the ground that though “tribunalization” has been allowed subject to safeguards, the NTT Act “crosses the boundary” and “encroaches the exclusive domain” of the High Courts. 
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Paper Board notified for the purpose of E-ICC and E-Trip-some interesting analysis

0 comments Friday, September 12, 2014
The Punjab Excise and Taxation Department has notified Paper Board sold by manufacturers in the State of Punjab for the purpose of E-ICC and E-TRIP under Rule 64-A and Rule 64-B of Punjab VAT Rules, 2005.
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Punjab monthly VAT return Form 16 can now be filed online

0 comments Wednesday, September 10, 2014
The Punjab Excise and Taxation Department has issued a public notice, stating the filing of the monthly return of VAT-16, with effect from September 1, can be done online.
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No reversal of ITC on closing stock of iron and steel goods is warranted under rule 21(8) of Punjab VAT Rules.

0 comments Wednesday, August 27, 2014
Recently while filing the fourth quarter return of year 2013-14, the Excise and Taxation Department, Punjab asked for the closing stock of Iron and steel goods lying in stock of dealers as on 29.01.2014 for the purpose of making reversal on such stock at the rate of 2.20% of the available Input tax credit on such closing stock. The reason for such action was the newly added rule 21(8) in Punjab VAT Rules, 2005, which was introduced w.e.f. 01.02.2014.
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Allahabad High Court Bars Non-Advocates From VAT Practice

0 comments Saturday, August 9, 2014
The Tax Lawyers Association filed a Writ Petition claiming that Rule 73 read with Rule 79(2)(f) of the U.P. Value Added Tax Rules 2008 which permits outsiders to practice in the field of Law before the VAT Authorities under the VAT Act is ultra vires section 33 of the Advocates Act 1961 which provides that only Advocates are entitled to practice before any Court or authority.
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Deputy CM orders withdrawal of amendment in first proviso to section 13(1) of PVAT Act, 2005

0 comments Tuesday, July 29, 2014
Punjab deputy chief minister Sukhbir Singh Badal on Tuesday ordered withdrawal of the amendment made in the first proviso to section 13 (1) of the Punjab VAT Act, 2005 for availing input tax credit and asked the excise and taxation department to draft an ordinance in this regard and present it for approval in the next meeting of the state cabinet.
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Reasoned orders and principle of fairness in administrative actions-a need of the hour

0 comments Monday, July 28, 2014
It is the general tendency of the adminstrative authorities more so of the tax authorities to pass non-speaking orders or to pass orders in violation of principle of fairness and rules of natural justice, without giving any opportunity of being heard to the effected person. The authorities in many case pass orders in gross violation of rules of natural justice.
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Capital asset can be deemed to be transferred by mere agreement to sell for the purpose of exemption u/s 54

0 comments Sunday, July 27, 2014
Where assessee having executed an agreement to sell in respect of a house property, purchased a new residential property within one year from date of agreement to sell, in view of fact that subsequently sale deed could not be executed within prescribed time for reason that assessee had been prevented from dealing with said residential house by an order of a competent court, a valid 'transfer' took place within meaning of section 2(47) by executing agreement to sell and, consequently, relief under section 54 was to be granted to assessee in respect of purchase of new residential property.
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Inncorrect or erroneous claim under VAT does not attract penalty proceedings

Madhya Pradesh High Court in Super Traders v Additional Commissioner of Commercial Taxes has held that incorrect or erroneous claim not sustainable under VAT law would not make a case of concealment of taxable item, therefore penalty is not leviable in such case.
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Changes made by Finance (No. 2) Bill, 2014 as passed by the Lok Sabha


1. Unlisted securities and units of MF transferred between 1-4-2014 and 10-7-2014 shall be deemed to be long-term capital assets, if held for more than 12 months:
It is proposed that unlisted shares and units of a mutual fund (other than Equity oriented mutual fund) shall be categorized as long-term capital assets only if they are held for more than 36 months. The existing provision requires holding them for a period of more than 12 months so as to categorize them as long-term capital assets.
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Interest on loan taken against FDRs held allowable as it was incurred exclusively to keep intact income from FDRs

IT: In order to protect interest earnings from fixed deposits and to meet her financial needs, when an assessee raises a loan against the fixed deposits, so as to keep the source of earning intact, the expenditure so incurred in wholly and exclusively to earn fixed deposit interest income has to be allowed as deduction
IT: Once the assessee claims that the actual market value of the land or building is less than stamp duty valuation adopted by the authorities, it is incumbent upon the Assessing Officer to refer the valuation of said land of building to the Departmental Valuation Officer
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Supreme Court questioned Chartered Accountant's Role in Tribunal

0 comments Friday, July 25, 2014
The Supreme Court on Wednesday reacted sharply to the Centre's stand that the purpose behind creation of National Tax Tribunal (NTT) was to associate domain experts in deciding taxation disputes as it was often felt that judges lacked expertise in specialized fields. 
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Due date of Q1 returns of year 2014-15 finally extended, WS-7 to be optional

0 comments Thursday, July 24, 2014
Public Notice
Kind Attention: Dealers/Lawyers/Chartered Accountants/Other Stakeholders

 In the light of a large number of representations received from lawyers and trade bodies that it is difficult for them to work out the stock as required to be filled in WS-7 and in many cases the balance sheet/stock as of 31.3.2014 are not ready yet, the following changes have been made in VAT-15 for the 1st Quarter of 2014-15:
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Earnest money forfeited to be taxable as income-no more a capital receipt

0 comments Monday, July 21, 2014
It has been proposed to insert a new clause in section 56(2) to provide that any advance received on transfer of capital assets shall be chargeable to tax under head 'income from other sources', if such sum is forfeited and the negotiations do not result in transfer of capital assets. A consequential amendment is also proposed to section 2(24) to include such income in the definition of the term 'income'.
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Benefits of section 11 & 12 to be available retrospectively, in prior pending assessments

Under the existing provisions of aforesaid section 12A, conditions to be fulfilled by a trust or an institution before it can claim exemption have been provided under sections 11 and 12 of the Act. It is provided that before any benefit of exemption is claimed, the trust or institution should apply for registration under section 12AA and only after such registration has been granted such trust or institution shall be eligible to claim the benefit of such exemption. In case of trusts or institutions which apply for registration after the 1st day of June, 2007, the registration shall be effective only for the assessment years following the financial year in which application has been made.
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Amendments in section 54, 54F and 54EC influenced by judicial rullings

0 comments Sunday, July 20, 2014
The Finance Bill, 2014 proposes to restrict the benefits under sections 54 and 54F for investment in purchase or construction of one residential house in India. Following two changes are proposed in section 54F:

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Deductor to be deemed as assesee in deafult only in respect of actual tax liability of Non-Resident

0 comments Wednesday, July 2, 2014
CBDT in its instruction No. 2/2014 [F No. 500/33/2013-FTD-l], Dated 26-02-2014 issued in view of the judicial develpments in the cases of GE India Technology P Ltd. vs CIT [2010] 7 and Transmission corporation of AP Ltd v. CIT [1999] 105 Taxmann 742 decided by Supreme Court, has stated that a person who fails to deduct tax on payments made to non-residents, will be held as assessee in default only to the extent of tax actualy payable by such NRI and not in respect of TDS on the whole of amount.
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Lawyers want a share in tax audit pie

0 comments Saturday, June 28, 2014
Opening up a money-spinning career proposition for lawyers in the country, the Bar Council of India (BCI) has written to the Union ministry of finance and tax authorities such as Central Board of Direct Taxes (CBDT) that lawyers must be authorised to sign and furnish tax audit certificates/reports, which has been hitherto the bastion of chartered accountants. 
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Disallowance of input tax credit on the ground that seller is bogus or cancelled dealer-part II

0 comments Sunday, June 15, 2014
Another situation which in many of the cases under the Punjab VAT, which dealers are facing is the disallowance of input tax credit on the ground that the registration of seller of the goods has been cancelled or normally it is stated in the assessment orders that the person from whom goods have been purchased is a cancelled dealer.
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Disallowance of input tax credit on the ground that seller is bogus or cancelled dealer

0 comments Tuesday, June 10, 2014
The system of VAT was introduced in the sales tax law to bring more transparency, efficiency, to remove tax cascading etc. The difficulties which may arise in any system comes to picture only when the system is practically implemented. 
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Constitutional validity of section 39-A of Punjab VAT Act, 2005

0 comments Saturday, May 17, 2014
As per section 39A of Punjab VAT Act, 2005, the Punjab VAT Refund Fund has been constituted and the amount of tax collected as Advance Tax under Section 6(7) shall be credited directly into the said Fund. It has been provided that the Fund shall be maintained and operated by the Department of Excise and Taxation in such manner as may be prescribed. It has also been provided that after allowing the refund claims from the Fund, the balance amount shall be deposited in the Consolidated Fund of the State as may be prescribed. 
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CBDT's clarification on allowance of depericiation in BOT contracts

0 comments Wednesday, April 30, 2014
CIRCULAR NO. 9/2014 [F.NO.225/182/2013/ITA.II], DATED 23-4-2014
It has come to the notice of the Board that disputes have arisen as to whether the expenditure incurred on development and construction of infrastructural facilities like roads/highways on Build-Operate-Transfer ('BOT') basis with right to collect toll is entitled for depreciation under section 32(1)(ii) of the Act or the same can be amortized by treating it as an allowable business expenditure under the relevant provisions of the Income-tax Act, 1961 ('Act').
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Input Tax Credit w.e.f 01.04.2014 under Punjab VAT Act, 2005

2 comments Monday, April 28, 2014
Input tax credit is a concession granted by the State Government against the output tax liability on the sale or purchase of goods within the State jurisdiction. To avail such concession one has to fullfill the conditions imposed by the statue subject to which such concession is available.

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Advance tax on five new items levied under Punjab VAT Act, 2005

0 comments Sunday, April 6, 2014
Punjab Government has levied Advance VAT on 5 new items w.e.f 07.03.2014 these items are as follows:
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Further amendments in items taxable at single stage under Punjab VAT

0 comments Tuesday, April 1, 2014
Notification No. S.O. 23/P.A.8/2005/S.8/2014.- Dated 25th March, 2014

Whereas the State Government is satisfied that circumstances exist, which render it necessary to take immediate action in public interest;

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Supreme Court vacated stay on section 62(5) of Punjab VAT Act, 2005

0 comments Friday, March 14, 2014
Supreme Court of India in Amrit Banaspati Company Limited vs State of Punjab WP(c) 69 of 2013 has vacated stay on implementation and operation of section 62(5) of Punjab VAT Act, 2005, which was granted on 31.01.2014.

However the Supreme Court has stated in its order that there  shall not be any coercive steps for recovery of the amount in question. 

The record of proceedings in the said case is available on supreme court website which is made available herebelow for all concerned.
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Representation to Punjab Govt. on restriction of ITC on iron and steel under Punjab VAT

0 comments Thursday, February 27, 2014

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.
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Implications of newly added Rule 21(8) of Punjab VAT Rules, 2005

0 comments Sunday, February 16, 2014
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.
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Rahat for small traders in small towns-Punjab Small Traders Rahat Scheme, 2014

0 comments Friday, February 14, 2014
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.
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Punjab & Haryana High Court also stays section 62(5) of Punjab VAT Act, 2005

0 comments Wednesday, February 12, 2014
Recently Supreme Court in Amrit Banaspati Company Pvt Ltd vs State of Punjab WP(c) No. 69 of 2014 has stayed the implementaion and operation of section 62(5) of Punjab VAT Act, 2005 which provides for pre-deposit of 25% of additional demand before entertainment of any appeal.
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Outstanding creditors cannot be added to income u/s 41(1) even if such creditors are non traceable

0 comments Tuesday, February 11, 2014
 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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Due date of fiing ITR-V for A.Y. 2009-10,10-11 & 11-12 in refund cases extended to 31.03.2014

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.
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RAHAT scheme under Punjab VAT to be notified soon for traders of small town

0 comments Sunday, February 9, 2014

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. 
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Supreme Court stays section 62(5) of Punjab VAT Act, 2005-No need to pre-deposit 25% for filing appeal

0 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.
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Reduced rate of tax now made applicable from 01.02.2014- stock as on 31.01.2014 to be declared

0 comments Saturday, February 1, 2014
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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VAT on Cigarettes and Cigars in Punjab reduced to 20.5%

PUNJAB GOVT. GAZ. (EXTRA), JANUARY 29, 2014    195

(MAGHA 9, 1935 SAKA)
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VAT on milk and wheat reduced in certain cases under Punjab VAT

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:
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Rate of tax reduced on iron and steel goods-Rules 21,54 of Punjab VAT Rules amended

0 comments Friday, January 31, 2014
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.

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Punjab reduces VAT on cigarettes, iron and steel

0 comments Tuesday, January 21, 2014
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.
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Input Tax Credit is a concession granted by legislature, must be strictly construed

0 comments Sunday, January 5, 2014
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.
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Tax treatment of stock of goods as on 31.12.2013 taxable at first stage under Punjab VAT

0 comments Saturday, January 4, 2014
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.

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