AMIT BAJAJ ADVOCATE

Analysis of the major amendments under Punjab VAT (Second Amendment) Act, 2013 - Part-1

0 comments Thursday, November 28, 2013

The Punjab Value Added Tax (Second Amendment) Act, 2013 (Punjab Act No. 38 of 2013) has brought about major and very important changes under the Punjab VAT Act, 2005. All the changes are disucssed and analysed herebelow for the benefit of all blog readers:

THE PUNJAB VALUE ADDED TAX (SECOND AMENDMENT) ACT, 2013

0 comments Tuesday, November 26, 2013

Notification No. 49-Leg/2013.- Dated 15th November, 2013

The following Act of the Legislature of the State of Punjab received the assent of the Governor of Punjab on the 15th Day of November, 2013, is hereby published for general information:-

Due date for efiling of VAT return for Qtr2-2013-14 extended to 05.11.2013

0 comments Wednesday, October 30, 2013

PUBLIC NOTICE

ATTN:-TAXABLE PERSONS, ADVOCATES, CHARTED ACCOUNTANTS, COST

ACCOUNTANTS.

Due to heavy rush on online efiling and on demand by the trading community the

date of efiling of returns for the second quarter i.e. 01.07.2013 to 30.09.2013 is extended

upto 5th of November 2013.

Punjab to have single-stage VAT regime

0 comments Wednesday, October 23, 2013

In a major relief to traders, the Punjab Government has decided to remove the multiplicity in Value Added Tax (VAT) on all commodities by imposing it right at the manufacturing level. The move will not only simplify the taxation procedure, but also eliminate the practice of doing business without proper accounting of sales.

The decision to implement the single-stage taxation regime was taken by the state Cabinet yesterday. It decided to bring a Bill to this effect in the forthcoming session.

Once cleared by the Assembly, the government would ask all major manufacturers selling their goods across the state to charge entire VAT component from the distributor itself. The simplification of tax structure is the main thrust of the new trade policy, which would be announced on November 14.

Of the 2.25 lakh registered VAT dealers in Punjab, only 900 pay more than Rs 1 crore as VAT in a year. A large number of dealers do not pay any VAT, by not accounting sales in their books.
With the new taxation structure in force, Punjab will be amongst the few states to have brought in a single-stage taxation regime. Deputy Chief Minister Sukhbir Singh Badal said the step would go a long way in ensuring that all trade in Punjab was accounted for.

Simplifying things
* The new taxation regime will provide that VAT is imposed right at the manufacturing level

* The manufacturers will pay the entire VAT and then collect it from the remaining people in the supply chain (ie distributors, wholesalers and retailers etc.)

* Besides simplifying the taxation procedure, it will also eliminate the practice of doing business without proper sales accounting

Source: The Tribune

Public Notice on advance VAT under Punjab VAT Act, 2005

0 comments Monday, October 7, 2013

Excise and Taxation Department has issued a public notice on 06.10.2013 regarding recently levied advance VAT under Punjab VAT Act, 2005. This public notice specify that 100% adjustment of advance VAT is available against tax liability of a taxable person at the time of filing of his return. This public notice tends to suggest the intention of the legislature that no reversals from advance tax will be made in case of inter-state stock transfer or manufacturing of tax free goods or u/s 13(5) where ITC on certain goods is barred.

Goods on which advance VAT under Punjab VAT Act, 2005, is imposed

0 comments Sunday, October 6, 2013

Punjab Government has notified goods u/s 6(7) of the Punjab VAT Act, 2005 on which Advance VAT will be recovered. Section 6(8) of the Punjab VAT Act, 2005 earlier considered Entry Tax as deemed advance VAT.

Entry Tax withdrawn, Advance VAT levied

Punjab Government has withdrawn the Entry tax under the Punjab Tax on Entry of Goods into Local areas Act, 2000, which was under judicial scrutiny and was cause of continous litigation between the Government and the VAT dealers across the State.

Procedure for payment of Advance Tax under Punjab VAT Act, 2005

GOVT. of PUNJAB

Excise and Taxation Department

PUBLIC NOTICE

Dated: 4th October 2013

Attention: All VAT Dealers, Transporters, Chartered Accountants and Advocates

Subject: Payment of Advance Tax

F form under CST Act can cover transactions of a period more than one month

0 comments Saturday, September 21, 2013

Calcutta High Court in Cipla Limited vs Deputy Commissioner, Commercial Tax reported as VSTI 2013 Vol. 17 B-509 has held that There is nothing in Rule 12(5) of CST (R&T) Rules which could be construed to vitiate a declaration form i.e "F" form on a ground that such declaration form covered transactions for a period of more than a month.

Extension of time limit for assessment by a public notice on the website is not valid

0 comments Thursday, September 19, 2013

Punjab VAT Tribunal in Olam Agro India Limited vs State of Punjab (2013) 21 STM 128 has held that extension of time limit u/s 29 of Punjab VAT Act, 2005 from 3 years to 6 years, for making assessment of a person, by giving a public notice on the website of the department, is not valid extension.

Monetary limit for audit under Punjab VAT Act, 2005 raised to one Crore from Fifty lacs

0 comments Tuesday, September 17, 2013

GOVERNMENT OF PUNJAB

DEPARTMENT OF EXCISE AND TAXATION

(EXCISE AND TAXATION-II BRANCH)

NOTIFICATION

The September, 2013

No. . - In exercise of the powers conferred by sub-section (1) of

section 70 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 rules further to amend the Punjab Value added Tax Rules, 2005, namely:-

RULES

1 (1) These rules may be called the Punjab Value Added Tax ( Amendment) Rules, 2013.

(2) They shall come into force on and with effect from the date of their publication in the Official Gazette.

2 In the Punjab Value Added Tax Rules, 2005 in rule 41, for the words "fifty lacs",the words "one crore" shall be substituted.

D.P.REDDY,

Financial Commissioner Taxation and

Secretary to Government of Punjab,

Department of Excise and Taxation.

Processing fee amount revised under Punjab VAT Rules, 2005-certain points

Punjab Government has revised the amount of processing fee leviable under rule 40-A of the Punjab VAT Rules, 2005. Rule 40-A earlier envisages payment of annual processing fee of Rs. 800/- by every taxable person under the Punjab VAT Act, 2005.

Now the different amount of processing fee have been defined for different persons based upon the criteria of payment of taxes by them and their turnover.

Notification for Extension of date for receipt of ITR-Vs in CPC, Bengaluru, for the cases of AY 2012-13 and 2011-12 received in e-filed in FY 2012-13.

0 comments Sunday, September 15, 2013

There are many taxpayers who have uploaded their Income Tax Returnselectronically (without digital signature Certificate) for A.Y. 2011-12 [filed during F.Y. 2012-13] and for ITRs ofA.Y. 2012-13 [filed on or after1.4.2012], but have either not filed the corresponding ITR-V or have filed it with the local Income-tax office.

Plywood exempted from E-trip under Punjab VAT act, 2005

As the news has been coming that a lump sum tax scheme under Punjab VAT Act, 2005 for plywood industries will be soon notified, the plywood therefore has been exempted from the list of specified goods for the purpose of e-trip.

E-trip is a mechanism whereby one has to report the intra-state i.e within state transactions of specified goods and specified monetary limits only on the website of the Excise and Taxation Department, Punjab.

Clarifications on E-trip and E-icc

The Commissioner Excise and Taxation Punjab has issued a clarificaton that "Goods and Materials obtained from cutting of old ships and boats" as well as the :heavy melting scrap" are covered under the entry "irobn and steel" for the purposes of E-trip.

It also has been clarified that only the goods covered in order dated 17-07-2013 relating to e-trip and e-icc are the only goods for e-trip and e-icc needs to be done.

Overview of E-trip and E-ICC under Punjab VAT Act, 2005

1 comments Monday, September 2, 2013

What is E-Trip and E-ICC: E-trip and E-ICC has come into force w.e.f 01-08-2013 in Punjab. E-trip is the reporting of intra-state and E-ICC is the reporting of inter-state transactions meant for trade under section 51 of Punjab VAT Act. 2005 on the virtual information collection centre on the official website of the Excise & Taxation Department, Punjab i.e www.pextax.com.

E-trip and E-ICC have been implemented under Rule 64-A, 64-B and 64-C read with Rule 2(hh) of the Punjab VAT Rules, 2005. Although such E-trip and E-ICC system has been implemented w.e.f 01-08-2013 but by public notice dated 01-08-2013(Public notice of 01-08-2013 can be downloaded at the link available at the end of this article) the dealers were allowed time for upgrading their system for the purpose of e-trip till 01-09-2013 and till that time it was assured that no penalty will be levied u/s 51 for not doing E-trip or E-ICC.

Since 01-09-2013 has arrived therefore certain following points relating to E-trip and E-ICC are discussed heerbelow for the all concernds:

When E-Trip is required to be done: E-Trip is required to be done not in all transactions of movement of goods within State but in case of transactions of specified goods of specified monetary limit only.

Since E-trip is a reporting of intra-state movement oof goods within State on the virtual information collection centre i.e a compliance u/s 51 of the Punjab VAT Act, 2005 therefore only those transactions of intra-state movement of goods within State is required to be reported under E-trip system, which are meant for business only, as section 51 has applicability only in relation to transactions which are meant for Business.

Thus if an intra-state transaction is meant for personal use and not for business and trade then E-trip of such transaction would not be required.

Specified Goods and monetary limits in which E-trip is required:

Sr.No.	Name of the Specified Goods	Minimum Value
1	Cotton	Rs.50,000
2	Sarson	Rs.50,000
3.	Plywood	Rs.50,000
4.	lron and Steel (excluding Scrap)	Rs.50,000
5.	Yarn	Rs.50,000
6.	Vegetable Oil (edible and non edible)	Rs.50,000

It has been clarified in Public Notice dated 01-08-2013 that “Forging and Casting” items are not included
in the item “Iron & Steel” specified under Rule 64-A and 64-B.

After reporting the transaction under E-trip in form VAT-12-A, an electronic receipt would be generated which mandatorily needs to be carried along with the goods during their movement within State. E-Trip is required to be done before putting the goods in transit within the State.

Any transaction covered by multiple invoices with total value of all invoices exceeding the prescribed threshold, where the consignor & the consignee are the same and the goods are transported through the same vehicle shall be considered a single transaction for the purpose of minimum sale.

Maximum transition time prescribed under Rule 64-A: Rule 64-A(3) of Punjab VAT Rules gives power to Commissioner to specify maximum transition time for delivery of specified goods from one destination to the other destination. The maximum transition time has been prescribed as below:

For distance upto 100 Kms	6 Hours
For distance upto 200 Kms	10 Hour
For distance above 200 Kms	14 Hours

It has been further clarified in Public Notice dated 01-08-2013 that in case goods are being transported through a transporter, the requirements of e-Trip/e-ICC will not be applicable when the goods are being transported from the premises of the dealer to the transporter. In this case, these requirements shall be applicable when the movement of the goods starts from the premises of the transporter.

When E-ICC is required to be done: Reporting of inter-state transaction on the virtual information collection centre by a system of E-ICC is required to be done in two cases i.e in case of export of goods outside the state of Punjab and other is import of goods into the State of Punjab from outside by air, railway or dry port.

E-ICC in case of export of goods outside the State:Rule 64-B deals with the procedure for furnishing information under E-ICC system relating to export of goods outside the State of Punjab by any mode of transition. An owner or person incharge of the specified goods before putting the same into transit for export out of the State, for trade or commerce by any mode of transition has to report the information relating to such export on the virtual ICC in form VAT-12.

The specified goods for the purpose of E-ICC in case of export of goods outside the State are as follows:

Sr.No.	Name of the Specified Goods	Minimum Value
1	lron and Steel	Rs.50,000
2	Hosierv dnd readymade garments	Rs.50,000
3.	Pipes of all kinds i.e. MS Pipe, Gl Pipes, ERW Pipes, Plastic Pipes etc	Rs.50,000
4.	Rice	Rs.50,000
5.	Nut-bolt /Fastener	Rs.50,000

It has been clarified in Public Notice dated 01-08-2013 that “Forging and Casting” items are not included in the item “Iron & Steel” specified under Rule 64-A and 64-B.

Thus E-ICC is applicable only on the goods and monetary limits of a bill specified for this purpose as mentioned in the above table.In case of other goods or specified goods where bill value is less than the monetary limit of Rs. 50000/- , there is no need for need for reporting the transaction on E-ICC, rather the same will be recorded at the Information Collection Centre established at the borders of Punjab as and when goods reach such ICC.

It has also been clarified in public notice dated 01-08-2013 that any transaction covered by multiple invoices with total value of all invoices exceeding the prescribed thresh-hold, where the consignor & the consignee are the same and the goods are transported through the same vehicle shall be considered a single transaction for the purpose of minimum sale.

Maximum transition time for E-ICC: The maximum transition time for delivery of goods from place of departure to the nearest ICC falling enroute towards destination while exiting the State has been specified as under:

For distance upto 100 Kms	6 Hours
For distance upto 200 KMs	10 Hour
For distance above 200 Kms	14 Hours

However it should be noted that it has been clarified in public notice dated 01-08-2013 that for the goods being sent outside the State i.e. goods covered under Rule 64-B, the condition of maximum time limit to leave the State shall not apply.

E-ICC in case of import of goods into State of Punjab: If a person imports any goods into the State of
Punjab either by air or railways or by dry ports then as per Rule 64-C he needs mandatorily to report the said transaction on the virtual ICC in form VAT-12, before taking the delivery of such goods or before transition of such goods by road, whichever is earlier.

That means import of all goods by railway or air or by dry port will have to be reported on E-ICC and such reporting will have to be done before taking the delivery of such goods or before transition of such goods by road, whichever is earlier.

It should be noted that E-ICC system is applicable on the specified goods and monetary limit in case of Rule 64-B, but in case of Rule 64-C system of E-ICC is applicable on all the goods irrespective of nature of goods or the monetary limit.

username and passwords for E-ICC and E-trip: If a person wants to start reporting on E-ICC, he will have to get username and password for the same from the local jurisdictional officer. After getting the same, one can log on to the website of the Department i.e. www.pextax.com at the links available for E-ICC.

For E-Trip the user name is the TIN of the person and the password which is now working seems to be the old password for the efiling of returns which was used by such person before migrating its TIN on a new system namely COTIS as existing on the new website.

However it has been clarified by the Department on a public notice dated 01-08-2013 that Transporters will be able to submit data on behalf of the dealers on the website of the department.

Public Nortice Dated 01-08-2013

ITC on capital goods not to be reduced to 4% when tax on the same is paid at 12.5%-Punjab VAT Tribunal

0 comments Friday, August 30, 2013

Punjab VAT Tribunal has held in L.S. Rice Exports Pvt. Ltd. vs State of Punjab (2013) 45 PHT 597 (PVT) that reduction of input tax credit on capital goods from 12.5% to 4% when the purchases made by the assessee are on 12.5% is not sustainable. So the assessee is entitled to full ITC.

Notice for reassessment u/s 147 can be issued only after time limit for issuing notice u/s 143(2) has expired

0 comments Tuesday, August 20, 2013

Amritsar ITAT has held in DCIT vs Mangat Ram that jurisdiction under section 147 can be acquired only after limitation to issue notice under section 143(2) has expired.

In this case it has been held by the ITAT that The Assessing Officer cannot acquire two jurisdictions to issue notice under section 148 as well as under section 143(2), especially when there is a time left for issuing notice under section 143(2) with respect to the original return filed by the assessee on 13-3-2008.

Statement of Object and reasons behind Etrip in Punjab now disclosed by the Governement

0 comments Sunday, August 18, 2013

Few days back I had written an article namely “Etrip in Punjab-an Uncontrolled delegated legislation” in which I had raised a point that while giving discretionary power to the Commissioner to specify the goods for the purpose of Etrip certain policy should or guidelines should have been laid down according to which the Commissioner has to exercise its power to specify the goods for the purpose of Etrip under Rule 2(hh) read with rule 64-A and rule 64-B of Punjab VAT Rules, 2005.

Claim of entry tax deemed as advance tax under Punjab VAT Act not to be conditional

Introducton: Entry Tax is a tax levied under the Punjab Tax on Entry of Goods into Local Areas Act, 2000. It is levied u/s 3-A of the said Act on a dealer who is bringing the goods into local areas of Punjab.

Entry tax can be claimed as input tax credit by a person paying such entry tax against his output tax liability. However such claim of input tax credit of entry tax is available subject to the conditions mentioned u/s 13-A of the Punjab VAT Act, 2005. Section 13-A runs as under

"Subject to the provisions of this Act, a taxable person shall be entitled to input tax credit in respect of the tax, paid by him under the Punjab Tax on Entry of Goods into Local Areas Act, 2000, if such goods are for sale in the State or in the cource of inter-state trade or commerce or in the cource of export or for use in manufacture, processing or packing of taxable goods for sale within the State or in the cource of inter-state trade or commerce or in the cource of export."

Thus claim of entry tax as input tax credit u/s 13-A is available only in the circumstances mentioned above in the section. As per the provisons of section 13-A if a person pays entry tax on raw material to be used in the manufacturing of tax free goods, his claim of entry tax as input tax credit will be restricted.

However it is notable here that the provisions of section 13-A of the Punjab VAT Act, 2005 are not a complete code in it self as non-abstante clause is missing therein, infact the provisons of section 13-A are subject to the other provisions of the Act.

Position after entry tax deemed as advance tax: A very important change has been brought about the status of entry tax under the Punjab VAT Act, 2005 after the introduction of the provisions contained in sub-section (7) and (8) of section 6 the said Act w.e.f 12-08-2011, which needs to be understood before giving the input tax credit of entry tax paid.

Provisions of section 6(7) and 6(8) runs as under:

(7) Notwithstanding anything contained in sub-section (1) to sub-section (6), the State Government shall charge the tax in advance on the import of goods to be notified in such manner, as may be precribed, and at such rates, as may be notified, but not exceeding the rates applicable on such goods under this Act:

PROVIDED THAT such goods are meant for sale or use in manufacturing or processing of any goods for sale:

PROVIDED FURTHER THAT such tax collected in advance, shall be counted towards final liability of the taxable person at the end of each tax paid.

(8) The tax collected under the Punjab Tax on Entry of Goods into Local Areas Act, 2000(Punjab Act No. 9 of 2000), shall be deemed to have been collected under the provisions of sub-section (7).

A new incidence of taxation (that too with a non-abstante clause i.e irrespective of the taxable quantum of a person) has been created u/s 6(7) which is called as advance tax to be levied on the import of goods.

Whether such advance tax is within the purview of the Entry 54 of the State List or not wherein State Government can levy tax only on the sale and purchase of goods within the State, remains to be seen. However here in this article only status and claim of entry tax under the current provisions are discussed.

Such tax in advance is to be charged only on the goods which are meant for sale or use in manufacturing or processing of any goods for sale. Second proviso to section 6(7) further provides that such tax collected in advance shall be counted towards final liability of the taxable person.

No goods have been notified as yet u/s 6(7) on which tax in advance is to be charged, however section 6(8) creates a deeming legal fiction by which entry tax has been considered as tax in advance u/s 6(7).

Entry tax deemed as advance tax to be counted toward final liability: After the introduction of provisions of section 6(7) and 6(8) the status of entry tax is of a tax in advance under the provisions of Punjab VAT Act, 2005. Therefore its adjustment and claim towards the output liability should be allowed as advance tax and not as entry tax, as per the second proviso to sub-section 7 of section 6.

Meaning thereby if a person pays entry tax (now advance tax) on certain goods and uses them in manufacturing of tax free goods then claim of such entry tax(deemed as advance tax) should be allowed as per the IInd proviso to section 6(7).

Thus a person manufacturing tax free goods having nil final liability is liable to get the refund of entry tax paid by him as such entry tax paid(deemed advance tax) has to be counted towards final liability of the taxable person.

The question may be raised that provisions of section 13-A will restrict input tax credit of entry tax paid in the above mentioned case, but it should be noted that provisions of section 13-A starts with words "Subject to other provisions of this Act", therefore section 13-A is bound by the provisions of section 6(7) and 6(8) of Punjab VAT Act, 2005.Hence credit of entry tax deemed as advance tax is no more conditional one as per the provisons of section 13-A.

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