Sales Tax Review

August 2007

TRADE CIRCULAR.

No. PFT/2006/P.T./Adm-7/28 /B-  144

Gentleman/Sir/Madam,                                     

The Maharashtra State Tax on Professions, Trades, Callings and Employments Act, 1975 (Profession Tax Act) is being implemented in the State w.e.f. 1^st April 1975. Under the Act, every employer is required to obtain Registration Certificate, deduct profession tax from salary/wages of employees and pay the tax into Government Treasury. Every self employed person engaged in any profession, trade, callings and employment covered by entry 2 to 20 of the schedule appended to the Act is required to obtain Enrolment Certificate and pay profession tax yearly. The Government observed that, many persons/ firms/ companies / societies/ institutions etc. have not obtained registration certificate and/or enrolment certificate and are not paying profession tax. The Act provides for levy of penalty on such “persons” for failure to get enrolled/registered and pay tax due.

2. The Government proposes to undertake a survey of unregistered employers and unenrolled self-employed persons w.e.f. 1^st November 2007. However, before undertaking such a survey the Government has thought it appropriate to bring forth an amnesty scheme for such “persons” who come forward to pay arrears of tax or to get themselves registered/ enrolled. It is also made clear that, the “persons” who do not come forward for registration under amnesty scheme shall be liable to pay tax, interest and penalty much more than they are required to pay under this scheme. 

3. Accordingly the Government of Maharashtra has issued a resolution vide No. PFT-1107/C.A.16/Taxation-3 Mantralaya, Mumbai dt. 10^th August 2007. The aforesaid resolution is available on website www.vat.maharashtra.gov.in. This circular gives the details of the said Amnesty Scheme. The salient features of the scheme are as under; -

4. Scheme.

4.1 Duration of Scheme

The Amnesty scheme is open for the period from 1.09.2007 to 31.10.2007.

4.2 “Persons” eligible for the Amnesty Scheme are: -

All persons/ firms/ establishments whether enrolled/registered or not, who have not paid the tax/ interest/ penalty leviable/due under the Act are eligible.

4.3 Benefits under the Scheme

1. For tax payers not holding Registration/ Enrolment Certificate: -

1. Tax, interest, penalty in respect of periods prior to 1.04.2002 would be waived in full.

2. In respect of periods from 1.04.2002, 90% of the interest/penalty amount would be waived.

2. For tax payers holding Registration/ Enrolment Certificate: - 90% of the interest and penalty amount would be waived.

4.4 Conditions of Amnesty

1. Employers/ Self Employed persons not holding Registration Certificate/ Enrolment Certificate, as the case may be;- 

1. Unregistered tax payers must get themselves registered/ enrolled as the case may be.

2. The tax payable under the Act for the period from 1.04.2002 to 31.03.2007 is to be paid during the amnesty period.

3. 10% of the amount of interest and penalty leviable/due under the Act is to be paid during the amnesty period.

4. An application for amnesty in prescribed format (annexure-I) along with the proof of payment of requisite amount has to be filed before the prescribed authority.

2. Registration Certificate holders and Enrolment Certificate holders

1. The tax payable under the Act for the periods upto 31.03.2007 is to be paid during the amnesty period.

2. 10% of the unpaid amount of interest and penalty leviable/due under the Act is to be paid during the amnesty period.

3. An application for amnesty in prescribed format (annexure-I) along with the proof of payment of requisite amount has to be filed before the prescribed authority.

4. The persons must withdraw un-conditionally any appeal, application for revision, application for reference or writ petition, if any, pending in respect of the period for which amnesty is sought.  If subsequently, an appeal or reference or writ petition is filed and the matter is agitated, then amnesty benefit granted in respect of that period shall be withdrawn.

4.5 Procedure  

1. Employers/ Self Employed persons not holding Registration Certificate/ Enrolment Certificate, as the case may be;- 

1. Unregistered employers are required to apply for Registration Certificate in Form I and Unregistered persons are required to apply for Enrolment Certificate in Form II. The application form duly filled and signed should be submitted to registration officer along with address proof and the details of profession/trade/calling/employment.

2. On obtaining Registration Certificate/ Enrolment Certificate he should make the payment of tax payable in full and 10% of the interest and penalty leviable under the provisions of the Act.

3. Apply in prescribed format (annexure-I) along with the proof of payment of requisite amount before the prescribed authority.

2. Registration Certificate holders and Enrolment Certificate holders.

1. The registration/ enrolment certificate holders have to pay the amount of  tax due as per return/ assessment/ demand notice, if any for all the periods upto 31.03.2007 and 10% of the unpaid amount of interest and penalty leviable/ due, under the Act.

2. Apply in prescribed format (annexure-I) along with the proof of payment of requisite amount before the prescribed authority.

Note: -

1. The rate of interest are as follows;

1. For the period upto 30.06.2004 = 2% per month for the period of delay.

2. 1.07.2004 onwards = 1.25% per month for the period of delay.

2. Penalty for the unregistered/ unenrolled period; Penalty shall be calculated from the period from 1.04.2002 onwards and shall be calculated @ Rs. 5/- per each day of delay in case of employers and @ Rs 2/- for each day of delay in case of a person.

5. Under no circumstances, a person applying under amnesty scheme shall be entitled for refund of amount paid under the provisions of the Act.

6. No statutory order will be passed under the amnesty scheme and no appeal can be filed on the basis of amnesty scheme.

7. In case of any difficulty, you are requested to contact to the administrative Joint Commissioner of the respective division.

8. You are requested to bring the contents of this circular to the notice of all the members of your association.

Yours faithfully,

(SANJAY BHATIA)
Commissioner of Profession Tax,
Maharashtra State, Mumbai.