Sales Tax Review

January  2007

Important Trade Circulars

No.VAT-2006/Refund/68/Adm3
 

Gentlemen / Sir / Madam,

             At the time of the introduction of Value Added Tax in the State of Maharashtra w.e.f. 01.04.2005, the Bombay Sales Tax Act 1959 was repealed. Under the provisions of the Bombay Sales Tax Act 1959, a dealer was authorised to adjust refund due according to the returns furnished by him against the tax due and payable as per the returns furnished for any period. The Maharashtra Value Added Tax Act, 2002 provides for compulsory claiming of refund at the end of the financial year. The Financial year 2004-05 being the last year for Bombay Sales Tax Act 1959, a dealer was expected to claim the refund for the year 2004-05 under the repealed Act.

2. It has been brought to the notice of this office that many dealers who had refunds due under the Bombay Sales Tax Act for the period 2004-05 have adjusted such refunds towards VAT liability in the Financial year 2005-06.  It is possible that due to lack of clarity, some dealers, instead of claiming the refund in the last return filed for the financial year 2004-05, adjusted it in the return filed for the subsequent period during financial year 2005-2006.
    

3. Considering these facts, it is now decided to permit such adjustments for the first year (i.e. 2005-06) as a special case. Where such adjustments have already been made, these will be accepted (subject to the confirmation of refund claim). However, it is to be noted that such adjustments after the issue of this circular will not be accepted.
    

4. This circular cannot be made use for legal interpretation of provisions of law, as it is clarificatory in nature. If any member of the trade has any doubt, he may refer the matter to this office for further clarification.
    

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

Yours faithfully,

(B. C. KHATUA)

Commissioner of Sales Tax,

Maharashtra, Mumbai.