Query No. 1
My client reseller in spectacles a retail trade got first
time Registered in F.Y. 2005-06. He started business in April-05. He has opted
for composition scheme his turnover of sale crossed five lakhs on 7-10-05. He
applied for sales tax registration on 27-1-2006. He is retailer spectacles
rate changed from 12.5% to 4% w.e.f. 1-11-2006.
His turnover details are as under:
| for F.Y. 05-06 |
|
|
| |
Rs. in lakhs |
| |
Sale |
Purchase |
| 1-4-05 to 7-10-05
|
4.54
|
5.03 |
| 8-10-05 to 31-10-05
|
1.29 |
1.30 |
|
1-11-05 to 26-1-06 |
2.95 |
3.41 |
| 27-1-06 to 31-3-06
|
0.42 |
0.49 |
| |
9.20
|
10.23 |
How the tax liability should be worked out ?
-
Whether it will be 8% on the difference between sales &
purchase of full year?
-
Or whether tax liability for the period up to turnover
crossing 5 lakhs & (ii) U.R.D. period 8-10-05 to 27-1-06 & (iii) R.D. period
to be worked out separately.
-
If it can be quantified better.
(Hasmukh D Savla)
Reply
As clear from Composition Notification for retailers dated
1-6-2005 only registered dealer is entitled to composition. Therefore for URD
period no composition system can be availed. He can opt for composition from
27-1-2006 to 31-3-2006. The tax will be payable @ 8% on difference between
sale and purchase effected during above period. It is seen that during above
period purchases are more than sale and hence no tax will be payable. The URD
period from 1-4-2005 till 26-1-2006 will be separate and you will be liable to
pay tax as per regular provisions (after deduction u/s.3(2)). However you will
not be entitled to set off in above period and the tax on sale side will be
payable in full.
Query No. 2
I shall be highly thankful if you will kindly advise me on
the following points.
My client is a manufacturer of tin containers. His main
purchases are of tin sheets covered by Entry (6) of B-1 of BST Act.
As per rule 41-D, manufacturers are entitled to set off on
their purchases either tax separately paid or including of tax and supported
by form F.31.
As per Sub-Rule (3) of Rule 41-D and the proviso to
sub-clause (c) of sub-rule (3) of Rule 41-D states that those dealers who are
holding registration certificate as required by sec. 22 of the Act on
30-9-1995 and whose registration certificate is in force till today ar only
entitled to the benefit where the turnover of sales or purchases of the said
dealer did not exceed Rs. 12 lakhs in the previous year.
As per proviso the dealer holding R. C. on 30-9-95 are only
entitled to the said benefit whereas dealers who have obtained R. C. on
1-10-1995 and thereafter are denied the said benefit.
I shall be hightly thankful if you will kindly clarify
whether the above interpretation of the sales tax authorities is correct.
There shall be disparity between two class of registered dealers, one holding
R. C. on 30-9-1995 benefit whereas the latter is denied the same.
The assessment of my client for the period 2003-04 and
2004-05 is passed and the learned Sales Tax Officer has disallowed the claim
of the dealer as he is not holding R. C. on 30-9-1995 but on 1-7-1997.
An early reply will be highly appreciated.
Thanking you
Yours faithfully,
A.Y. Jagmag
Reply
In query you have raised issue whether interpretation of
Department is correct. In my view here there is no question of interpretation.
It is Government who has provided the benefit, in given circumstances. The
grant of set off is the prerogative of Government and they can put the
conditions, they think fit. Therefore if you wish to take set off you will be
required to fulfill given condition. Since you are not registered as on
30-9-1995, the assessing authority will be correct in disallowing benefit.
Though the question of disparity can arise here, the
Department authorities will not be able to solve the issue. Challenging the
provision before High Court will be the remedy.
Query No. 3
My query is if I am raising 10 invoice in a particular
month then shall round of each Invoice to nearest one Rupee or should it be
for all the 10 Invoices.
Arun R Sahu
Reply
There is no provision for rounding off invoice value. Only
in return the tax etc. is required to be rounded off. Rounding off provisions
are contained in section 39 which read as under.
"39. Rounding off tax, etc. –
The amount of tax, penalty, interest, composition money,
fine or any other sum payable, and the amount of set off or refund due under
the provisions of this Act shall be rounded off to the nearest rupee and for
this purpose, where such amount contains a part of a rupee consisting of paise,
then, if such part is fifty paise or more, it shall be increased to one rupee,
and if such part is less than fifty paise, it shall be ignored:
Provided that, nothing in this section shall apply for the
purposes of collection by a dealer of any amount by way of tax under this
Act."
It can be seen that there is no provisions for rounding off
invoices.
Query No. 4
Our client has his Head Office at Chennai and a Branch
Office at Mumbai. The Branch Office plans to book orders from customer (s) in
Maharashtra State and will issue Delivery Orders to Head Office.
While the goods are likely to be dispatched to customers as
consignees, directly from Chennai, the Head Office will raise its Tax Invoice
on the Branch Office as buyers and the customer will be shown in the Tax
Invoice and L/R as the consignee.
The Branch Office will raise Commercial Invoice on the
customers and charges VAT as applicable.
The Branch Office will also issue F form to the Head
Office.
Queries :
-
Is the proposed scheme of transactions valid as per the
CST/MVAT ?
-
If a customer places order for supply of agreed quantity
for, say, 3 to 6 months, with option to determine delivery schedule as
required from time to time, can this still be termed as a "Specific Order"
-
Please guide us if you feel that any specific procedures
to be adopted as followed to execute these type of transactions.
We shall be thankful to receive your valued opinion.
(Arun Kumar Murarka)
Reply
On given circumstances the dispatch from Chennai will be an
inter-state sale. CST is payable in Chennai. Reference can be made to judgment
in case of Sahaney Steel & Pressing Works (60 STC 301) and others.
Your other issues about delivery of agreed quantity in
given period or other procedural guidelines cannot be opined upon as full
facts are not known.
Query No. 5
First of all thanks to the Association for being replying
my queries now my query is as under:
-
That whether the set off is available under MVAT Act in
the Tax-free manufacturer (Viz., Cloth Manufacturer) on the Local Purchase
of Machinery which is taxed @ 12.5% & 4% respectively.
-
That whether set off is available under MVAT Act the
Tax-free manufacturer on purchase of motor car for his personal use as the
Bill is taxed separately @ 12.5% & which is capitalized also whether there
is tax on sale of such car.
-
In composition Scheme is 1st six months; i.e., 1st
Quarter position of sale & purchase is as under:
|
a) |
Sale |
100000 |
|
|
|
|
Purchase |
90000 |
|
|
|
|
|
_______ |
|
|
|
|
|
10000 |
@ 8% |
800 |
|
b) |
Sale |
100000 |
|
|
|
|
Purchase |
110000 |
|
|
|
|
|
______ |
|
|
|
|
|
10000 |
|
NIL |
My query is that whether the Negative (-) figure of Rs.
10000/- can be carry forward or not and if yes then can be adjusted to the
subsequent period or not. I mean to say whether the Negative figure can be
c/f. to same financial year or to next financial year.
Donald J. Rohra, STP
Reply
-
The set off on machinery is available in full.
-
No set off on motor car. Tax on motor car is payable.
-
Excess purchases cannot be carried forward or adjustable in
next period, of same financial year or subsequent financial year.
Query No. 6
I have gone through the Sales Tax Tribunal decision in the
case of M/s. Pan Music and Magazine Ltd. vs. State of Maharashtra in S. A. No
258 of 2006 decided on 27th April, 2006. In this case the assessment order for
the financial year 1999-2000 was made on 3-3-2005. In this case all the
returns including annual return were filed before the end of 6 months from the
end of assessment period. In view of section 33(4A) it is held that the said
assessment made after 3 years from the end of the year is barred by
limitation. It seems that the effect of provisions of section 33(4B) is not
considered by which the period of 3 years is extended to 5 years for
assessment in respect of financial years from 1999-2000 to 2002-2003. Though
the said provision of sec. 33(4B) is enacted by Act No. VIII of 2003 which was
published in Govt. Gazette on 29-3-2003 it is specifically given retrospective
effect from 1-4-1999. Since this retrospective amendment is made before the
expiry of limitation originally fixed by sec. 33(4A) in this case, I think it
cannot be overlooked and had it was brought to the notice of Tribunal the
result would have been otherwise. Please let me know your esteemed view
through appropriate column in S.T.R.
R. S. Singhania
Reply
I concur with above view.
Query No. 7
Sub: Clarification regarding CST Rate
Ref: Notification No. CST / 2005 / CR-53/Taxation-2 dated
1-12-2005
With reference to the above & under instruction of M/s.
Hindustan Copper Ltd. Kindly provide the following clarification.
-
Weather, the above Reference Notification is still in
force whereby the rate of cst fixed at 1% on sale of cast copper rods
manufactured by the company & sold from state of Maharashtra
-
Weather the tax under cst on cast copper rods as
applicable under above referred notification will change in light of
change in cst rate from 4% to 3% with effect from 1-4-2007.
-
The company intends to manufacture rectangular copper
conductor & copper strips. Weather the company i.e. Hindustan Copper Ltd.
can sale these products under cst from state of Maharashtra by charging
cst @1% in view of above referred notification.
Printed below the copy of notification issued by Finance
Department Govt of Maharashtra
Kindly reply through the column replies to queries by shri
C. B. Thakar advocate
(Devendra J. Kothari)
Finance Department
Mantralaya, Mumbai 400 032,
dated the 1st December 2005
Notification
Central Sales Tax Act, 1956.
No. CST 2005/CR-53/ Taxation 2 - In exercise of the powers
conferred by sub-section (5) of section 8 of the Central Sales Tax Act, 1956
(No 74 of 1956), the Government of Maharashtra, being satisfied that it is
necessary so to do in public interest, hereby directs that the tax payable
under the said Act by M/s. Hindustan Copper Ltd. having its place of business
in the State of Maharashtra in respect of sales of Cast Copper Wire Rods,
manufactured by the said company, made by it in the course of inter-State
trade or commerce to a registered dealer or the Government, from any such
place of business, shall be calculated at the rate of one per cent of its
turnover in so far as the turnover or any part thereof relates to such sales.
By order and in the name of the Governor of Maharashtra
SHASHANK MATHANE
Officer on Special Duty to the Government
Reply
-
& Since the above notification is not
-
withdrawn it remains valid today and for period from
1-4-2007 also. No change due to reduction in rate from 4% to 3%. However,
since Government Department will not be able to issue ‘D’ form, sale at
concessional rate of 1% cannot be made to them, unless they issue ‘C’ form.
-
The concession is given to sale of ‘cast copper wire rods’.
Unless rectangular copper conductor or copper strips fit into above
description they cannot enjoy the concession. You have to see the nature of
goods as to whether they can fit into above given description and if yes, you
can enjoy benefit, otherwise not.
