Date : 9-7-2005

To

The Commissioner of Sales Tax
Maharashtra State, Mumbai.

Ref: Clarification about certain difficulties under MVAT Act, 2002

Dear Sir,

We introduce ourselves as an Association of traders dealing in Dry-Fruits and various masala products. The members of our association are semi wholesalers. We sell to retail traders as well as directly to consumers in small household quantities. Therefore, the sale may be in big packages as well as in small quantities like 50 gms, 100 gms etc. The items dealt in by our members are also many, may be about 100 or more.

The Government of Maharashtra has implemented VAT in Maharashtra State from 1-4-2005. We traders had no time to understand the implications thereof. We are also not in position to get authoritative clarification from any quarter. Under above circumstances we request your goodself to clarify our following genuine difficulties at the earliest.

There are two issues as follows:

1. Pro rata method for bifurcation of sales

As mentioned above we effect purchases in bulk and we can bifurcate purchases in purchase register in slabwise tax; i.e., 0%, 4%, 12.5% category.

However, our sales are in bulk as well as in retail to consumers. The sales takes place in cash also. We prepare cash memos for the same. In the cash memos we cannot bifurcate the sales in taxwise slabs as the sales are in very small quantities and the number of sales bill very large. Under above circumstances, we suggest that we will effect sale by two methods. To our trader customers we will issue. ‘Tax Invoice’ where in the bifurcation of sales will be available.

For cash sales we will issue cash memos; i.e., other than tax invoice. The total sales so effected will be bifurcated in different tax slabs in the proportion of the percentage of such tax slabs on purchase side. In other words, on the basis of proportion of different tax slabs in purchases, the sales will be bifurcated applying the said percentages. For example, in total purchases of Rs. 100, if the proportion of 0%, 4% and 12.5% goods is 20%, 30% and 50%, we will bifurcate our total sales, effected by cash memos, in 0%, 4% and 12.5% sales in above ratio of 20%, 30% and 50%. We will work out our VAT liability accordingly.

We request to approve above method of working.

2. The other issue is about stock records. As stated above, in our business it is difficult to keep quantity wise stock of each and every item. The purchase is in bulk where as sale will be in very small quantities. It is therefore impossible to maintain the detailed stock.

Under BST Act, 1959 we have maintained books regularly in above fashion, without quantity wise detailed stock. The Department has always accepted the same without any objection. We request to clarify that our above method of keeping the accounts in proper and sufficient even under VAT. In absence of such clarification we are afraid that our members will face difficulties from the department persons in future. Any further information will be made available on hearing from your good office.

For explaining above issues in detail we request for short personal appointment and oblige.

Awaiting an appointment from your goodself.

Thanking you,

Yours faithfully,
For The Mandvi Meva Masala Merchants’ Association, Mumbai Vashi

Sd/-
President

To

The President
The Mandvi Meva Masala Merchants' Association.
APMC Market, Face II, Central Facility Building 542,
Vashi, Navi Mumbai 400 703.

No. Sr. D.C. (A & R)/VAT/MMB-1005/40/Adm-3/B 35 Mumbai. Dt. 31-1-2006

Sub: Clarification about certain difficulties under MVAT Act, 2002

Ref: Your letter dt. 9-7-2005 reg. prorata method bifurcation of sale/stock.

Gentleman,

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

The dealers are free to adopt the pro-rata method, if they undertake to follow it consistently without wavering. However, the proposed method can be applied only where identification is impossible. Kindly take a note of it.

Yours faithfully,

Sd/-
(S.D. Bhandare)

Sr. Deputy Commissioner of Sales Tax,
(Act & Rule) Maharashtra State, Mumbai.

PROCEEDINGS UNDER THE RIGHT TO INFORMATION ACT, 2005,
BEFORE THE STATE PUBLIC INFORMATION OFFICER OF THE OFFICE OF THE COMMISSIONER OF SALES TAX, MAHARASHTRA STATE, MUMBAI.

READ:- (1) Application dated 16-10-2006 of M/s. The Mandvi Mewa Masala Merchants' Association, Mumbai – Vashi, C/o. C.B. Thakar & Co., 206, 2nd Floor, Adamji Building, 413, Narshi Natha Street, Katha Bazar, Mumbai 400 009, under the Right to Information Act, 2005.

ORDER
(Disposal of request u/s 7 of the Right oto Information Act, 2005)

No. DC (I&E/ADM-13/Rt. Inf. 168/2006, B-189;                                                      Mumbai, date, 7-11-2006.

1. M/s. The Mandvi Mewa Masala Merchants' Association, Mumbai, Vashi, of Mumbai (the applicant) have, by their application dated 16-10-2006 made under the Right to Information Act, 2005 requested to provide the information about Non receipt of reply to earlier letters.
    

2. In order to get the information assistance of Sr. Deputy Commissioner of Sales Tax (Act & Rule), Maharashtra State, Mumbai was sought as per provisions of Section 5(4) of the Right to Information Act, 2005.
    

3. The applicant has requested to provide the information about status of earlier letters dt. 9-7-2005, 16-8-2005 & 7-7-2006 addressed to the Commissioner of Sales Tax. It has been informed by the Sr. Deputy Commissioner of Sales Tax (Act & Rule) that, reply to letter dt. 9-7-2005 has been already sent to the applicant by letter dt. 31-1-2006. Copy of this letter dt.31-1-2006 is enclosed with this order.
   
   Letters dt. 16-8-2005 and 7-7-2006 are only reminders.
    

4. The application of M/s. The Mandvi Mewa Masala Merchants' Association, Mumbai, Vashi, is disposed of by passing this order under the Right to Information Act, 2005.
    

5. If the applicant desires to prefer an appeal against this order, he may file an appeal to the Additional Commissioner of Sales Tax, Mumbai Zone, Mumbai, whose office is situated at Vikrikar Bhavan, 9th Floor, New Building, Mazgaon,
   Mumbai 400 010.