Sales Tax Practitioners Under Hanging Sword

Prior and after the implementation of the Vat Act, the Sales Tax Practitioners are taking untiring efforts for compliance of various procedures. As the Act was born handicapped the first job for the practitioners was to study and point out the defects and lacunas to the head of department and to make representation either for amendment or for administrative concession or clarification. Since beginning, unnecessary deadlines for compliance were provided like that of filing before a particular date a Stock Statements for set-off under rule 51, bulky application for TIN etc. What use the department made of such information furnished, is a mute question. We have already requested the Hon’ble Commissioner to find out the status and whereabouts of all such applications and statements, especially of TIN Applications which were prepared by us under heavy stress, as the time granted for filing the same was very short.

The administrators must understand, though such deadlines legally speaking are for dealers, in reality are for the practitioners. Therefore, the practitioners are always under the Hanging Sword of such deadlines for which neither there is any reward from the State nor any word of appreciation. Even after three years the scenario is unchanged. While introducing the new provision, the role of Sales Tax Practitioners in execution is always ignored and, therefore, the new things introduced suffers from many defects and still they are being introduced with immediate effect without taking into account the time required for the practitioners to understand, represent, get the amendment or clarification from the department and to comply the same in a shortest time allotted. As a result the Sales Tax Practitioners are always working under hanging sword so as to save their clients from interest and penalty. The examples are numerous and some of them have been dealt with hereinafter.

Due Date for filing Form 704: As reported by our many members, many dealers are unable to find out a Chartered Accountant for Vat Audit who in fact is practising on Sales Tax and, therefore, have requested their Sales Tax Practitioners to do the needful. Therefore, the practitioners are under Hanging Sword of dilemma as to whether the High Court would allow them to sign such report and in case the petition is dismissed, whether the due date would be extended so as to facilitate their clients to find out and appoint a Chartered Accountant for Vat Audit. Unfortunately on 19th March, the High Court adjourned the matter to 28th and, therefore, all the practitioners came under the Hanging Sword of penalty that may be levied on their clients for non filing of Form 704 within time.

New Form of Returns and Electronic Returns: The other example is of newly introduced forms of returns and the provision to furnish electronic returns with immediate effect. The forms made available on the website are technically defective. This also is an example of unnecessary enthusiasm shown by the State without consulting and considering the Sales Tax Practitioners though they alone are playing the major role for preparation and filing or returns, whether the dealer is LTU or small. The little relief given vide Circular No. 8 for filing the returns in old forms up to 31st March is not enough and, therefore, we have requested the Commissioner of Sales Tax to make it effective from the returns covering the month of April 2008 and that too if all the technical defects including website version of return forms are cured. Let us hope that the Hon’ble Commissioner would accept our request.

Business Audit: The officers now have started business audits in full swing. As they are asking the records of all the three years, the client expects the presence of practitioner. Even the presence of a practitioner has been proved useful for the officer in order to understand the accounting compliance. As a result the practitioners are finding it difficult to cope up with the time.

Time barring assessments: The assessments under the BST Act for the period 2002-03 are getting time barred on 31st March, 2008. Therefore, the Practitioners at a time are under stress to comply with these assessments, to understand the technicality in filing returns in new forms, to prepare audit report in Form 704 if the date is not extended by the High Court, to attend before the Business Audit officer for necessary compliance and if the Bill for the new amendment is introduced it is necessary to study the provisions and to inform their clients accordingly. Unfortunately, the budget speech did not contain anything about extension of time barring period for assessments referred above and also about non-priority cases mentioned in Government Resolution dated 5th January, 2007. We have been informed (confidentially), by one of the Officials that the L.A. Bill to be presented on or before 31st March has only one provision regarding extension of time barring period by one year in case of the periods 2002-03, 2003-04 and 2004-05. This means, the Budget Speech as usual is not supported by Bill to carry out necessary amendment to the MVAT Act. This lethargy on the part of administrators, lack of any guidance and information from the department, keeps the practitioners under the Hanging Sword till the last minute.

On this background the question arise, whether the duty of the State is only to enact? The answer is certainly in the negative, but the way Act, Rules and Notifications are being issued, the law makers must be under impression that their duty is only to enact and the compliance will be automatic. We appeal to all concerned to always consider the Sales Tax Practitioners as a backbone and understand their importance in execution of everything provided under the Act.