AMENDMENT IN FEW SECTION OF MVAT ACT
8th floor,
Vikrikar Bhavan, Mazgaon, Mumbai-400010.
TRADE
CIRCULAR
No. VAT /AMD-1012/IA/ADM-8 , Mumbai – Date -06.08.2012
Trade
Circular No. 13T of 2012
Sub Amendment
to the certain Laws administered by the Sales Tax Department.
Ref. (1)
Maharashtra Act No. VIII of 2012 dated 25th April 2012.
(2)
Notification No. VAT.1512/C.R.65/Taxation-1 dated 4th July
2012.
Gentlemen/ Sir/Madam,
To
give effect to the Budget proposals, a Bill (Legislative Assembly Bill No. XVII
of 2012) to amend the Maharashtra Sugarcane Purchase Tax Act, 1962, the
Maharashtra State Tax on Professions, Trades, Callings and Employment Act,
1975, the Maharashtra Tax on Entry of Motor Vehicles into local Areas Act,
1987, the Maharashtra Tax on Luxury Act, 1987, the Maharashtra Tax on Entry of
Goods into local Areas Act, 2002 and the Maharashtra Value Added Tax Act, 2002
was introduced in the Legislature. The said Bill has been passed by both the
houses of the Legislature. The Act is now published in the Maharashtra Government
Gazette dated 25th April 2012. (Mah. Act No. VIII of 2012).
2. Amendments effected by the Maharashtra Act
No. VIII of 2012. •
The salient features of the amendments are
briefly explained below:
(A) Amendments to the Maharashtra Sugarcane
Purchase Tax Act, 1962.-
Amendment of section 12B‑
(1) The section 12B empowers the State
Government to provide for exemption from sugarcane purchase tax under
circumstances specified in this section.
(2) A new clause (d) is added. This empowers
the State Government to exempt either fully or partly the payment of the
sugarcane purchase tax in respect of the factories which have established
co-generation unit for the generation of electricity from the byproducts of
the factory.
(B) Amendments to Maharashtra State Tax on
Professions, Trades, Callings and Employment Act, 1975:-
1. Amendment of section 3.‑
(1) Section 3 provides for the levy of the
Tax. Sub-section (2) is amended and after second proviso a third proviso is
added.
(2) According to the existing provisions of sub-section
(2), every person who is engaged in any professions, trades, callings or
employment and who falls under the given class or classes mentioned in the
Schedule is required to pay tax.
(3) Further, sub-section (2) of section 5
provides that every person liable to pay tax shall obtain a certificate of
enrollment.
(4) However, it is experienced that there are large number
of un-enrolled persons who do not get enrolled because of their liability for
all the earlier periods. It is now provided that the liability to pay tax for
the un-enrolled period shall be restricted to eight years.
(5) The period of eight years shall be computed from the end
year immediately preceding the year in which he has obtained enrollment
certificate. Or in the cases where proceedings are initiated by the department
against such person for enrollment, then eight years shall be computed from the
end of the year preceding the year in which such proceedings were initiated.
Eg.
(a) If a person is self employed with effect from 1st April
2000 however he makes an application for enrollment on 1st June
2012 then in this case the said person will be required to pay taxes with
effect from lat April 2004.
(b)
The said person will get the benefit of this amendment and will be eligible for
exemption in respect of taxes prior to let April
2004.
2. Amendment to section 6.‑
The section 6 provides for filing of the returns by every
registered employer. The amendments to this section are explained below:-
(1) Amendment of sub-section (3):‑
(a) Sub-section (3) provides the penalty of Rs.300/- per return
for failure to file a return within prescribed time.
(b) This sub-section (3) is amended. The
amendment provides for late fee of Rs. 1000/- for failure to file a return
within the prescribed time.
(c) Accordingly, an employer shall make the
payment of late fee of Rs. 1000/- for each default and the said amount shall be
paid on or before filing of the return for the default period.
(d)
The State Government has appointed the 1st August
2012 to be the date on which this sub-section would be operative. Therefore,
the provisions of this sub-section shall be applicable with effect from 1St August
2012.
(e)
The employer shall be liable to pay late fee in respect of all the late returns
that are filed on or after the 15t August
2012.
(f)
In other words late returns that are filed on or before 31st July 2012, the old provision of
sub-section (3) will remain in force.
(2) Addition of new sub-section (4):- Earlier there was no provision to file the
revised returns under the Profession Tax Act. A new sub-section is added which
enables filing of the revised return. The revised return may be filed under
following circumstances:
(a) If an employer discovers any omission or incorrect statement
in the return filed by him, then he may file a revised return within six months
of the end of the year containing the period of return/ or before the notice
for assessment is served on him in respect of the period covered by the said
return, whichever is earlier.
(b) If on receipt of intimation as a result of audit or
inspection (i.e. search and seizure u/s 18) by the Profession Tax Authority,
the dealer agrees with the finding contained in such intimation, he may file a
revised return within thirty days from the date of receipt of intimation.
3. Amendment of section 19.‑
(1) The section 19 provides for the refund of the excess
payment, if any.
(2) A technical amendment is carried out so as to include
employer.
(C) Amendments to the Maharashtra Tax on Entry
of the Motor Vehicles into Local Areas Act, 1987.
1. Amendment of
Section 2 clause (b), section 9A and section 13:‑
Appointment of appellate authority is provided under section 5 A
reference to section 6 instead of section 5 is being made in the above
sections. In order to correct this obvious mistake an amendment is made and the
said reference is now substituted by section 5.
2. Amendment to clause
(I) and (g) of section 2 and to Section 3:- A technical amendment is carried out to
above provisions. Now in addition to “the use or sale”, the word “consumption”
is added.
3. Addition of new section 7A.‑
(1) New section 7A is inserted. This provides for
electronic filing of returns and payment of tax, interest penalty or any other
amount payable electronically.
(2)This section further empowers the Commissioner to notify the
class or classes of importers who shall file return and make payment under the
Act electronically. The section also provides for submission of appeal, application,
annexure and such other document as may be desired by Commissioner in an
electronic form
(3) In addition to this, the Commissioner may by notification
amend any form or introduce new form of returns, applications, annexures, etc.
that are required to be filed in electronic form
(D) Amendments to the Maharashtra Tax on the
Entry of Goods into Local Areas Act, 2002.
1. Amendment to the SCHEDULE appended to the
Act.
(1) The amendments to the various entries in the SCHEDULE are
carried out. The SCHEDULE under the Entry Tax on Goods is amended and is now
aligned with the corresponding SCHEDULE entries under the Maharashtra Value
Added Tax Act, 2002.
(2) Now, the rate of tax under Entry Tax Act shall be as per the
rate of tax provided on the similar goods under the MVAT Act as amended from
time to time.
2. Addition of New Entry-16: A new entry 16 for Natural Gas is added.
The rate of tax in respect of Natural Gas with effect from 1st May 2012 will be
12.5%. This
will include natural gas in all forms such as CNG, PNG, LNG.
(E) Amendments to the Maharashtra Value Added
Tax Act, 2002:‑
1. Amendment to Section 2:‑
Addition of New clause (15A) and (17A):-
(1) The clauses (15A) and (17A) are
inserted with retrospective effect i.e. with effect from 1st April 2005.
(2)
The Act at many places refers to the term. “Motor
Spirit” and “Petroleum Products”. In order to provide clarity, these terms are
now defined.
(3) Accordingly, it has been provided
that “Motor Spirit” shall include High Speed Diesel Oil, Aviation Turbine Fuel
(Duty paid and Bonded), Aviation Gasoline (Duty paid and Bonded) and Petrol.
(4) Whereas the Petroleum Products shall
include Superior Kerosene Oil (SKO), Liquefied Petroleum Gas (LPG), Furnace Oil
(FO), Light Diesel Oil (LDO), Raw Naptha or Naptha, Low Sulphur Heavy Stock.
(5) In addition to this, the State Government has also taken
powers to notify any product as Motor Spirit or Petroleum Product.
2. Introduction of Purchase Tax.
(1) Purchase tax has been introduced for the first time in
the MVAT Act. The State legislature provided purchase tax only in respect of
two commodities, namely cotton and oil seeds. Accordingly sections 6A and 6B
are inserted.
(2)
Section 6B which is in respect of Oil seeds has been notified to be effective
from 1st May, 2012.
(3) Whereas section 6A in respect of levy of purchase tax on
cotton is yet to be notified. Since section 6A is not notified, all the
amendments made to various provisions in respect of purchase tax, will have to
be read in respect of oil seeds only.
(4) As a consequence of introduction of purchase tax the
amendments to relevant sections are carried out. These amendments are explained
below:-
(a) Amendment of clause (29) of section 2:‑
(i) Clause (29) defines the term “tax”. At present
“tax” means the Sales Tax leviable or payable.
(ii) As a result of this amendment, the term “tax” shall
mean the Sales Tax or Purchase Tax leviable or payable.
(b) Amendment of section 3:‑
(1) Amendment of sub-section (2):‑
(a) This sub-section provides that a dealer is
not liable to pay sales tax till his turnover of sales in a year, does not
exceed prescribed limit.
(b) On the similar lines, this sub-section is amended to
provide for exemption from purchase tax on turnover of purchases of Oil seeds,
in a year, till such turnover exceeds prescribed limit.
(ii) Amendment to sub-section (3):‑
(a) This sub-section deals with the
continuance of the liability to pay tax till the cancellation of registration
certificate.
(b) Amendment is made to include the turnover
of purchases liable for purchase tax.
(iii) Amendment to sub-section (4):‑
(a) This sub-section prescribes the limit of
turnover of sales. Every dealer whose turn-over of sales exceeds the prescribed
limit will become liable to pay tax.
(b) In view of the amendment, the dealer whose turnover
either of the sales or purchases exceeds the prescribed limit in respect of
purchases of oil seeds from a person or dealer who is un-registered will become
liable to pay purchase tax, if the oil seeds are transferred to branches or to
own place of business or agent outside the State or if the oil seeds are used
in manufacturing of tax-free goods or in the manufacturing of taxable goods,
which are sent outside the state other than by way of sale,
(iv) Addition of New sub-section (5A):‑
(a) A new sub-section (5A) is inserted. For calculating
the limit of turnover of sales for liability to tax certain contingencies are
given in sub-section (5) under which the turnover of sales is to be considered.
(b) The contingencies given in sub-section (5)
shall be applicable for calculating the limit of turnover of purchases of oil
seeds.
(c) Insertion of New Sections for levy of
Purchase Tax.- In order to
levy purchase tax in respect of Cotton and Oil seeds subject to the conditions
of the charging section 6A and 6B, consequential amendments to provisions of
other sections have been made. These sections alongwith the charging sections
are discussed as follows:
(1) Insertion of New Section 6A.‑
(a) Section 6A deals with the levy of purchase
tax on the URD purchase of Cotton. This purchase tax is to be levied under the
circumstances given in this section.
(b) However, section 2(a) of the Amendment Act provides
that provisions of section 6A shall come into force from such date as the State
Government, may appoint in this behalf. As of today, the State Government has
not appointed any date for the purpose of this section. Hence, this section has
not come into force. Till such time the purchase tax as provided under this
section will not be levied in respect of the purchases of cotton.
(ii) Insertion of New Section 6B.‑
(a) Section 6B deals with the levy of purchase
tax on URD purchases of Oil seeds subject to the given circumstances.
(b)
As provided in section 2(a) of the Act No. VIII of 2012, the provisions to levy
Purchase Tax on oil seeds have come into effect from 1st May
2012.
(c) This section provides for the levy of purchase tax on the
purchases of oil seeds from an un-registered dealer or person, under following
circumstances:-
(I) if the purchases of Oil Seeds from un-registered dealer or
person are dispatched outside the State other than by way of sale to his branch
or agent.
(H) if the purchases of oil seeds from un-registered dealer or
person are used in the manufacturing of,‑
(A) taxable goods and the said goods are dispatched
outside the State to his branch or agent, or
(B) tax-free goods.
(d) Purchase tax under this section will become payable in
the month in which the contingencies referred in point (c) and (d) above occur.
In other words, purchase tax will not be payable merely because the oil seeds
are purchased from un-registered dealer, but it will become payable only on the
fulfillment of the contingencies as explained above.
(e) Provision for the set-off in respect of the purchase
tax is made in the rules.
(v) Amendment of Section 45:
(a) Section 45 deals with the liability of the agent to
pay tax on behalf of the principal.
(b) This section is amended so as to cast liability in certain
contingencies on certain agents to pay sales tax or, as the case may be,
purchase tax on behalf of the principal.
(vi) Amendment of section 94:‑
(a) This section deals with the deemed payment
for holder of the Entitlement Certificate under the deferral scheme.
(b) In view of the provision for levy of purchase tax, a
consequential amendment is carried out.
3. Amendment of Section 8(3):‑
(1) Sub-section (3) is amended to
include co-developer. Further, the Explanation to clause (e) is amended and the
terms Developer and Co-developer in respect of Special Economic Zone are
defined.
(2) Such Developer or
Co-developer will be required to be certified by the Commissioner of Sales Tax.
(3) The notification in this respect has not been yet issued.
4. Amendment to Section 8(3C):- Textile
Processors:
(1)
The section 8(3C) provides for the exemption of tax to the textile processors
in respect of the material transferred in the execution of works contract. This
exemption is available to the textiles/fabrics as covered by the 1st Schedule to Additional Duties
of Excise (Goods of Special Importance) Act, 1957.
(2)
The Schedule to ADE Act was amended by Finance Act of 2011 and is made
effective from 8thApril 2011. As a
result of which textile processors in respect of transfer of material in the
execution of works contract became liable to tax.
(3) Accordingly, amendment provides that the
reference to ADE Act, 1957 shall mean the ADE Act as it stood before the
Finance Act of 2011. (i.e. before omission of First Schedule of ADE Act,).
(4)
The effect of the amendment is that with effect from 1st May 2012 the textile
processors will be exempted from tax in respect of the material transferred in
processing of textiles that are described in column (3) of the First Schedule
of ADE Act as it stood immediately before the 8th April
2011.
(5)
Needless to say, for the intervening period starting from 8th April 2011 to 30th April
2012 the activity of textile processors in respect of transfer of material in
the execution of works contract will attract tax.
5. Amendment of Section 20:‑
(1) A new sub-section (6) is added. At present, the
section 29(8) provides for levy of penalty of Rs.5000/- for failure to file a
return within the prescribed time.
(2) The amendment provides that any dealer or person who
fails to file return within the prescribed time will now be liable to pay a
late fee of Rs. 5000/-.
(3)
The State Government has appointed the 1st August
2012 to be the date on which this sub-section would be operative. Therefore,
the provisions of this sub-section shall be applicable with effect from 1stAugust 2012.
(4)
The dealer shall be liable to pay late fee in respect of all the late returns
that are filed on or after the 1st August
2012.
(5) In
other words late returns that are filed on or before 31•t July
2012, the old provisions of section 29(8) will remain in force.
6. Amendment of Section 26:‑
(1) This section is in respect of appeals
before the appellate authority or Tribunal. In order to facilitate speedy
disposal of appeals, certain measures are proposed.
(2) Sub-section (6) provides for admission of appeal and
stay to order appealed against on part payment of disputed amount. A proviso
has been added to sub-section (6). It is applicable to all appeals filed either
before departmental appellate authorities or the Tribunal.
(3)
The amended provisions shall be applicable in respect of all the appeals that
filed on or after this amendment or are pending as on 1st May
2012.
(4) It is now provided that, where an appellant seeks
adjournment on three occasions or fails to attend the appeal proceedings on
three occasions whether consecutive or not, the stay, if any, granted against
the disputed amount shall stand vacated (when the appellant seeks third
adjournment or if fails to attend for third time) unless the appellant pays 15
percent of the disputed amount or Rupees 15 crore, whichever is less, as part
payment, within the time stipulated by the appellate authority or Tribunal.
(5)
The three occasions for non attendance or adjournment, in case of pending
appeals, shall be counted with effect from 1st May
2012. The appellant will get the benefit of three adjournments at the first
appellate stage as also at Tribunal Stage.
(6)
In other words, if the appellant takes any adjournment or fails to attend on or
after 1st May 2012, the said
adjournment(s) or failure to attend shall be taken into consideration so as to
count three occasions.
(7) An explanation is added to the proviso to clarify that the
above ceiling of 15 per cent. or 15 Crore shall also include the part payment
already made against disputed dues. Thus if 10% part payment was made at the
time of admission of appeal, then additional 5% of disputed dues will be
payable under this proviso for continuation of stay.
(8) If the appellant fails to pay the amount within the
time stipulated by the appellate authority or tribunal, the stay to recovery
shall stand vacated. If the amount is paid within the time given by the
appellate authority, the stay shall continue. The appellate authority or
Tribunal shall accordingly pass such orders modifying or vacating the earlier
stay.
(9) This order for additional part payment is made
non-appealable.
(10) Needless to say that where part payment at the time of
admission is already made at 15% of the disputed amount or Rs.15 Crore,
whichever is less, then this proviso will not come into picture.
7. Addition of new section 26A:-
(1) A new section 26A is added to empower the Commissioner to
decide and regulate the filing of the appeal before the Hon’ble High Court.
This section is similar to section 268-A under the Income Tax Act. Presently,
in each case, where the decision of the Tribunal is not accepted by the
department, appeal is required to be filed to the Hon’able High Court. This
results in large number of appeals being filed, even on the same issue and even
for insignificant revenue involved.
(2) For this purpose, the Commissioner is empowered to issue
orders, instructions or directions and fix the monetary limit in respect of
which an appeal to the Hon’ble High Court may or may not be filed.
(3) Further, if the Commissioner
decides not to file appeal or to file appeal in respect of a particular issue
or a dealer, then this decision will not preclude the Commissioner from
filing the appeal in respect of the same issue or the same dealer for any
other period
(4) In the event the Commissioner has not filed any appeal
as stated above and the issue is already in appeal in some other case, the
appellant in that particular case in which appeal is not filed, will not be
liable to contend that the Commissioner has given assent in the issue and
hence, the department is barred from contesting the issue involved.
(5) The instructions, directions and orders to
be issued under this section and modalities of operation of this section will
be issued in due course.
8. Amendment to section 29:‑
(1) Addition of new sub-section (2A):
(a) Penalty for failure to apply for
registration etc (for Unregistered dealer). A new sub-section (2A) is added. The
amendment provides that a dealer, who fails to apply for registration or
carries business without obtaining registration and in contravention of the
provisions of the Act, shall be liable to pay a penalty of a sum equal to the
amount of tax payable by the said dealer for the period during which he has
remained un-registered.
(b) For this purpose, the Commissioner shall provide an
opportunity of being heard.
(2) Deletion of sub-section (8):
(a) Sub-section (8) provided for the levy of penalty for
failure to file a return within the prescribed time. As discussed above,
section 20 is amended and a late fee of Rs. 5000/ – is provided for failure to
file a return within the prescribed time.
(b)
This sub-section is deleted with effect from 1st August
2012.
(c) In
respect of the belated returns filed on or before 31st July 2012 the provision of
sub-section (8) of section 29 shall be applicable.
9. Addition of new section 31A:
(1) A new section is added to empower the State Government to
issue a notification,-
(a) so as to require any person, local
body, authority or agency to collect an amount towards tax.
(b) so as to notify the rate at which
such collection shall be made [see sub-section (2)].
(2) This section is divided into two parts.‑
(a) Clause (a) provides that if any person,
local body, authority or agency auctions the right for excavation of sand under
their jurisdiction, then he shall collect, from the successful auction
purchaser, an amount towards tax at the rate notified by the State Government.
(b) Clause (b) provides that any person, local
body, authority or agency who has temporary possession or control over the
goods that would be notified, then, pending the clearance of the said goods by
the purchaser or consignee, he shall collect from the said purchaser or
consignee an amount at the rate notified by the State Government.
(3) The amount so collected shall be in addition to the amount
fixed towards auction of sand or, as the case may be, for clause (b) towards
any charges recoverable by the said authority. The amount so collected shall be
paid into Government Treasury in the manner prescribed under rule 41 and rule
45.
(4) The authority shall issue a certificate in Form 421 to
the effect of tax collected at source to the auction purchaser or dealer from
whom it is so collected.
(5) If the aforesaid person or authority deposits the
amount so collected into Government Treasury, then such purchaser shall be
deemed to have been discharged the tax liability to the extent of the said
amount and may adjust the amount towards his tax liability in the return for
that period.
(6) The notification in this respect has not been yet issued.
10. Amendment of Section 41:
(1) Sub-section (4) of section 41 is amended. A new clause (c)
is added.
(2) By addition of this clause, the State Government is
empowered to issue notification and exempt payment of the tax payable either
fully or partly on the sales of furnishing cloth as covered under entry 101 of
SCHEDULE C.
(3) The exemption proposed to be provided
shall be in respect of all sales except the sales made at last point.
(4) The notification under this sub-section has yet not been
issued.
11. Amendment of section 59:‑
(1) Section 59 empowers the Commissioner to transfer any
proceeding from one authority to another.
(2) This
sub-section is amended to include Raigad district in addition to Brihan Mumbai
and Thane. The Commissioner, now will not be required to give a hearing for
transfer of proceedings from Brihan Mumbai or Thane to Raigad or vice-versa.
12. Amendment of section 86:‑
(1) Section 86 provides for tax invoice and memorandum of
sales or purchases. Sub-section (1) and (3) provides a time period for
preservation of invoice, bill, cash memorandum etc. upto three years. This
period is increased to “eight years”
(2) This amendment is carried out with effect
from 1st April 2005.
13. Amendments so as to give effect to the
Re-organization of the Sales Tax Department.
(1)
The Government of Maharashtra, Finance Department had issued a Resolution dated
18thNovember 2011
and proposed re-organization of the Sales Tax Department.
(2) This re-organization necessitated certain changes in
the various Acts administered by the Sales Tax Department. The Additional
Commissioner (Establishment), Maharashtra State under these Acts is designated
as Special Commissioner, Maharashtra State.
(3) Further, in order to give effect to the
re-organization, relevant amendments are carried out to the definition of the
term Commissioner so as to include a Special Commissioner.
(4) Similar amendments are carried out in the other Acts
administered by the Department except the Sugarcane Purchase Tax Act and the
Chit Fund Act.
3. This circular cannot be made use of for legal interpretation
of provisions of law as it is clarificatory in nature. If any member of the
trade has any doubt, he may refer the matter to this office for further
clarification.
4.You are requested to bring the contents of this circular to
the notice of the members of your association.
Yours faithfully,
(SANJAY BHATIA)
Commissioner of Sales Tax,
Maharashtra State, Mumbai.
