TIN Certificates

The sales tax department created a big hype about timely applications for TIN before 31-12-2005 and resorted to a stringent step to treat the dealers as URD in case of failure to make the application. While no scheme for administrative relief is being proposed for delayed applications, the Department itself is not geared up to issue the TIN certificates. TIN are available on website of the Government of Maharashtra but certificates are not sent to the dealers even after 2-1/2 months. Sometimes the vendors, contractees in other States demand the registration certificates from the dealers and, therefore, they must possess the same. The Commissioner of Sales Tax must expedite the process of sending the certificates at the earliest or else, the department may lose face before the dealers.

Administrative Relief – Long awaited

It is true that diligence is expected from every tax-payer. However, lapses do occur in spite of having best intentions to comply with the law. The Department received an overwhelming response in respect of TIN applications. However, there are a few dealers who could not apply for TIN within the given time-frame. Most of them have applied afresh and have been granted VAT/TIN numbers accordingly after a gap of period which will be treated as URD. The legal consequences will follow such as collection of tax will be forfeited, no set-off will be allowed etc. which are totally unwarranted. Such dealers are facing undue hardships due to discontinuation of the registration certificate. Therefore, Commissioner of Sales Tax should consider the plea of such so-called defaulters and grant them an administrative relief in consultation with the State Government.

The interesting part in the whole process is that the fresh applicants are required to pay the registration fees at Rs. 5,000/- treating the application as voluntary. However, one has to bear in mind that liability to pay u/s. 3 continues even after 31-12-2005 and therefore, the registration certificate has to be granted on the basis of such liability. In other words, the application cannot be treated as made voluntarily attracting fees at Rs. 5,000/-. The necessary fees will be restricted to Rs. 100/- since the application should be construed as being made on crossing the requisite turnover limit. Therefore, the department cannot insist on payment of fees at Rs. 5,000/- unless the dealer does not have the required turnover of sales during the year. The Commissioner of Sales Tax may instruct the registration department accordingly.

Entry Tax on Motor Spirits, LDO, Furnace Oil etc.

One of the enactments that remained intact even after introduction of VAT is Maharashtra Tax on the Entry of Goods into Local Areas Act, 2002 (hereinafter referred as Entry Tax on Petroleum Products). The Act seeks to levy entry tax on the import of petroleum products into the State if the same are not meant for resale. In other words, the manufacturers or processors or other dealers who bring such goods into the State for their own consumption as fuel or raw material are required to pay such entry tax. This measure was taken to plug the loophole and distract the dealers from buying fuel from nearby States on payment of C.S.T. at 4% against ‘C’ Form to avoid very high rates of local tax on fuel and motor spirits and thus, safeguard State’s revenue.

A schedule has been appended to the said Act specifying the rates of entry tax against each petroleum product including motor spirits. It is worthwhile reading a proviso to section 3 of the said Act which is reproduced below.

"Provided that the rate of tax to be specified by the Government in respect of any commodity shall not exceed the rate specified for that commodity under the Sales Tax Act, The Bombay Sales of Motor Spirit Taxation Act, 1958 or, as the case may be, the Maharashtra Purchase Tax on Sugarcane Act, 1962."