To
The President
Bulk Drugs & Allied Dealers Association,
2nd Floor, Block No. 3, Devkaran Mansion,
43, Shamaldas Gandhi Marg,
Mumbai 400 002.

No. DC(A&R)/VAT/MMB-1006/141/Adm-3/B/121 Mumbai, dated 15-2-2007

Sub : VAT Audit Report in Form 704 and others.

Ref : Your letter No. 116/2006-07/M dated 15-1-2007

With reference to the above mentioned subject, the clarification is as follows:

1. CST Declaration : As per the amendment carried out in CST Act 1956, the declaration are to be submitted on quarterly basis. Since this is statutory requirement, no other alternative is acceptable.

2. Revised Return after Audit : The dealer can file a single revised return for the period ending March. If this is not possible then periodic revised returns for different periods may be filed.

3. Consolidation of return in respect of Form 201 and Form 221 : It is to be noted that item No. 5K in Form 221 specifically provides the detail of difference between net turnover and MRP in case of Medicine. If this figure is added in net turnover, we get turnover of sales at MRP. There will not be any problem for consolidation in respect of Form 201 & 221.

4. Form 704 : Your suggestion about non-existance of column to claim set off based on MRP in section 'C' is noted and will be considered at the time of correcting the Form 704. Kindly note.

(S. D. Bhandare)
Sr. Dy. Commissioner of Sales Tax (A&R)
Maharashtra State, Mumbai.

Dated 3rd April, 2007

To
The Commissioner of Sales Tax,
Maharashtra State, Mumbai.
Respected Sir,

Ref: Your Trade Circular No. 28T of 2007 dt. 30-3-2007

Vide above Circular your goodself have informed about new rate structure under CST Act, 1956. Amongst others, it is explained as under:

"The net effect of the amendments is as follows:–

1. The rate of CST on inter-State sale to registered dealers (against Form-C) shall stand reduced from 4% to 3% or the rate of VAT applicable in the State of the selling dealer, whichever is lower.

2. The rate of CST on inter-State sale other than sale to registered dealers shall be the rate of VAT applicable in the State of the selling dealer.——"

from clause (b) it can be seen that the sale effected to unregistered dealers will be liable to tax at the rates as applicable under the Local Act. For example, if local rate is 1%, then for inter-State sale effected to unregistered dealer, the said rate of 1% will apply, as per above clarification.

However a question can arise when the sale is to registered dealer but he is not able to issue ‘C’ form.

Under above circumstances the sale cannot be covered by clause (a) above (being not supported by ‘C’ form) as also not by (b) above since the same is not to unregistered dealer, (it being to registered dealer). There is no guidelines on above issue in the circular or in the amended CST Act. We feel that the rates mentioned in (b) above should also apply to cases where the sale is to registered dealer but he is not issuing ‘C’ form. This is also because there is no any separate provision for levy of tax at different rate when the sale is to registered dealer but the ‘C’ form is not forthcoming. The business class is in confusion due to above anomaly. We request to clarify the issue at the earliest and oblige.

Thanking you,

Yours faithfully,
For Sales Tax Tribunal Bar Association

C. B. Thakar
(President)

To

Mr. Sunil Ghelani
Hon. Secretary,
The Bombay Fountain Pen Manufacturers and Traders Association
7 & 8, Trimurti Enclave, Mamledar Wadi,
Cross Road No. 6, Malad (W), Mumbai – 400 064

No. JC/HQ-II/Ref.Aud/CR-CHK/Pen.Mfg./B-997 Mumbai Dt. 15-3-2007

Dear Sir,

Sub: Cross verification visits for VAT Refund Audit Your letter dated 8-3-2007

With respect to the abovementioned subject, suggestions contained in your letter are considered upon and the concern VAT Audit Officers have been instructed 'to follow it, with immediate effect.

Suggestion by Bulk Drug Association Action taken

1. Advance intimation should be given to All VAT Audit officers are instructed Dealers from dept. specifying in advance – to fix date in consultation with the

1. Date of visit dealer and inform in advance
2. Documents required for verification documents required for verification

2. Minimum monetary limit of Rs. 1000/- per All VAT Audit Officers are instructed Invoice should be fixed for issue of cross not to issue cross check memo, if VAT Checks by VAT Audit Officers. amount involved in Purchase invoice is below Rs. 100/-
    
3. Visiting officers sometimes demand copy Concern VAT Officers are instructed of previous years Asst. Orders etc. not to ask photocopies of any Docu-ment or records, except copies of VATPaid Challans.

Thanking you,