Advance Tax on certain goods under the Punjab Value Added Tax Act, 2005 w.e.f. 04.10.2013

The Punjab Government has introduced the new tax i.e. Advance Tax by making an amendment in the Punjab Value Added Tax Act, 2005 on the import of the certain goods in the State of Punjab. The advance tax is attracted on 30 items the list of the same is enclosed for your kind reference as earlier entry tax was attracted on 26 items but by introduction of advance tax, the govt. has increased the list by adding 4 more items i.e. Wheat, Rice, Paddy and Copper in all its shape and forms including copper scrap.

·        Certain conditions are added for levy and exemption of advance tax but the notification is totally     silent regarding the Section or Rule:

(1)   Who imports the said goods into the state, shall pay the said tax, on the presumption that such goods are meant for the purposes of sale or for use in manufacture or processing of goods meant for sale unless, it is proved otherwise by such taxable person. It is further presumed unless, it is proved otherwise by such taxable person, that such goods or any product manufactured therefrom shall not be sold below the price at which such goods have been purchased and imported in the state.

(2)   Who intends to dispose of such goods, in any of the following manner, namely:

(a)   In manufacturing of any tax free goods as given under section 16 of the Act; or

(b)   By sending them outside the state, other than by way of sale in the course of interstate trade or commerce or in the course of export out of india; or

(c)    In manufacturing or in packing of taxable goods sent outside the State, other than by way of sale in the course of interstate trade or commerce or in the course of export out of india; or

(d)   By making zero rates sales as given under section 17 of the Act, of such goods , or of the goods manufactured therefrom,

He may make an application to the Designated Officer who if after verifying all aspects of the case, arrives at a decision that the payment of the aforesaid tax, would result in refund, may exempt such taxable person from the payment of the said tax or reduce the rate of advance tax, with the approval of Deputy Excise & Taxation Commissioner, incharge of the concerned division, by passing speaking order in this regard.

   

·        Procedure for making the Payment of Advance Tax

1.      Just like the dealers used to do in the case of Entry Tax, they will be able to deposit the  Advance Tax at the ICCs. For this an entry will be made in the computer system at the ICC.

2.      In addition to above, the dealers will be able to deposit the Advance Tax in the office of AETC as well as through internet banking.

3.      Procedure for depositing the Advance Tax in the office of AETC:

a.      If a dealer frequently imports goods in to the State, he may deposit a lump-sum of Advance Tax in the office of AETC.

b.      For this purpose the dealer may make payment through challan in form VAT 2 under subhead ‘Advance Tax’ (0040-00-111-01).

c.       Once a dealer has made the payment in the Treasury in the above sub-head, he will present the receipt at the front window at AETC office. The AETC office will immediately enter the amount of Advance Tax into the credit of the dealer in the computer system.

d.      Thereafter whenever the dealer presents any goods at any ICC, the system will automatically work out the Advance Tax due and deduct that amount from the lump-sum already deposited by the dealer. The dealer/ driver will be given a receipt showing the advance tax deducted on account of that import.

4.   Procedure for payment through internet banking:

a. In order to make the facility of payment of Advance Tax 24x7, the Department has developed a software and tied up with following seven banks:

i. ICICI bank

ii. HDFC bank

iii. Punjab National Bank

iv. Kotak Mahindra

v. Axis Bank

vi. Bank of Baroda

vii. Canara Bank

b. For availing this facility, the dealer may visit the website of the department www.pextax.com and open the VAT 2 challan and fill up the details in the sub-head “Advance Tax” (0040-00-111-01).

      c. The dealer can do so either through his log-in or through facility of open payment.

      d. After the challan details are filled, the dealer or the person making the payment will be routed to the bank website where he can make the payment of the advance tax. His ledger with the Department will be updated post successful transaction.

      e. Thereafter whenever the dealer presents any goods at any ICC, the system will automatically work out the Advance Tax due and deduct that amount from the lump-sum already deposited by the dealer. The dealer/ driver will be given a receipt showing the advance tax deducted on account of that import.

                  By virtue of this notification, Government has levied the advance tax on certain items by granting exemption to taxable persons from entry tax in other words we can say that Govt. has replaced the name of entry tax to Advance tax so that taxable persons cannot avail the benefit of deferment of entry tax granted by the Hon’ble Punjab & Haryana High Court. Here it is pertinent to point out that Govt. has introduced the clause for exemption from advance tax on certain categories which are discussed above but the procedure prescribed is not effective as neither the time limit is prescribed for passing the order nor the list of relevant documents required for availing the exemption is prescribed which clearly reflect that officers were granted discretionary powers to grant exemption certificate which will result in harassment to the persons who falls in the category of exemption.

Extension Order passed by the Commissioner for framing an assessment after the period of 3 years was set aside by the Hon'ble Punjab VAT Tribunal, Chandigarh

Assessment plays vital role under the Punjab Value Added Tax Act, 2005 and the period for framing an assessment is 3 years from the date of filing of an annual statement i.e. 20^th of November but the power conferred to extend the period for framing an assessment after the 3 years has its own importance as the commissioner can extend the time period upto 6 years from the date of filling of annual statement but this power can only be exercised where circumstances so warrant so the legislature has given this power to the commissioner for extending the period under some special circumstances but this power cannot be exercised after the period of 3 years if the orders for extension will be passed after the lapse of 3 years then it has no legal sansity beside this if commissioner want to extend the time under the “circumstances so warrant” such circumstances could be that the assessment Proceedings remained stayed under order of the High Court or any competent authority or that some enquiry was pending, which could not be completed before the expiry of limitation period or that some information was being collected from certain sources or that some natural calamity had obstructed the Designated Officer to proceed further in the matter and so on. These powers cannot be exercised as a matter of routine or convenience or to cover up the lackadaisical attitude or dalliance or laying of the Designated Officer power of framing of assessment. The Ld. Commissioner is under an obligation to serve notice on the appellant as per Rule 86 of the Punjab Value Added Tax Rules, 2005, but the same was not followed and the practice under the Punjab Value Added Tax Act, 2005 for framing an assessment after the period of 3 years was challenged for the year 2007-08 in the case of M/s Aman Enterprises vs. State of Punjab and the same was decided vide order dated 04.05.2012 in favour of appellant. Copy of the same is enclosed.

Note on Entry Tax under the Punjab Tax on Entry of Goods into Local Areas Act, 2000

Applicability

Entry tax is leviable on all persons including taxable person registered under the Punjab Value Added Tax Act, 2005 on entry of goods into the state of Punjab for the notified goods of which the list alongwith rates of entry tax is mentioned below in table. Here it is pertinent to point out that entry tax is payable on the goods even imported from outside the territory of India. Entry tax is not leviable if the goods are not notified for levy of entry tax U/s 3 or 3A or goods though notified but are coming in the state of Punjab for Job Work, Rejected Material and Returned Material subject to certain conditions or goods are not meant for state of Punjab but are in transit for destination outside the state of Punjab.

Mode of Payment

             In case entry by Road the importer has to pay the entry tax at the Information Collection Centre and for other imports in Punjab by Rail/Air the entry tax has to be deposited in the office of concerned Asst. Excise & Taxation Commissioner incharge of the district within 2 days of such import and in case where goods are coming through Rails and ICC is situated at Railway Station then entry tax is to be paid at that Railway Station. The payment of entry tax can be made either at the ICC or in the office of the Asst. Excise & Taxation Commissioner incharge of the district against a receipt in form TEG-II in any of the following modes

i)                    in cash or by way of Demand draft

ii)                   if permitted by the Excise & Taxation Commissioner, by cheques against the Bank guarantee

iii)                 with the prior approval of the Excise & Taxation Commissioner, deposited in the office of the Asst. Excise & Taxation Commissioner of respective district within 48 hours

iv)                through online or card based modes available with the concerned authorized banks.

Return

There is no separate return prescribed for Entry tax but dealer is under an obligation to file the statement along with Quarterly return.

Deferment of Entry Tax

It is pertinent to point out that importer can defer his liability of entry tax by furnishing an undertaking where he is registered and for that he has to furnish the detail regarding the import of goods for which he has deferred the payment of entry tax as interim stay has been granted by the Hon’ble Punjab & Haryana High Court on the entry Tax in Punjab in the case of M/s Bhushan Steels and Power Ltd. Vs. State of Punjab and consequently a general circular has also been issued by the Punjab Govt. allowing all dealers by furnishing undertaking can get the benefit of deferment until the final orders of the court as it is yet to be decided whether entry tax in Punjab will stand or will be struck down if it lacks constitutional validity.

Conditions for Admissibility of entry tax paid:

            Section 13A under the Punjab Value Added Tax Act, 2005 stipulates Conditions for ITC admissibility in respect of entry tax paid by a taxable person. ITC would be admissible if the goods imported are for the purpose of:

            a)         Sale in the state

            b)         In the course of inter state trade or commerce

            c)         In the course of export

d)         For use in manufacturing activity of taxable goods within the state or In the course of inter state trade or commerce or In the course of export

  

Revised Rate of Entry Tax from 18.09.2012:

Change and enhancement under Punjab Value Added Tax Act, 2005 and Punjab Tax on Luxuries Act, 2009 wef. 05.09.2012

Change and enhancement under Punjab Value Added Tax Act, 2005 and Punjab Tax on Luxuries Act, 2009 wef. 05.09.2012

Government need funds for various purposes like maintenance of law and order, health services, education etc. and for this obtains funds from various sources and out of which VAT is major source. Taxes are conventionally of two types Direct taxes and Indirect taxes. Direct taxes are paid directly by the person concerned and indirect taxes are paid by person by recovering the same from other person i.e. consumers which ultimately burdens the general public. No doubt VAT is one of the important indirect tax and major source of revenue for the state governments but heavy indirect taxation not only breaks the backbone of the poor public rather it encourages the tax evasion. It is settled principle that higher will be the tax, higher will be the evasion. While levying tax, government should always care for the General Public which is missing in the public notice issued on 05.09.2012. Beside this Punjab govt. has invented the new source of revenue by burdening the taxable persons with Annual Processing fee of Rs. 800/- which is levied in lieu of operation, maintenance and upgradation ol such facilities and services as electronic issuance of statutory forms, e-filing of returns, e-payment of taxes and such other online and offline services being rendered or proposed to be rendered by the Excise and Taxation Department whereas similar services are provided without any such fee by other revenue departments of central and other states

Effects of Public Notice dated 05.09.2012 are as under:

1.                 Sale made to CSD is Tax free and sale made by CSD is taxable

As per Public notice,

“Now as per new amendment the entry regarding "sales made to Canteen Stores Department subject to the furnishing of a certificate duly signed and stamped by the officer authorized to make purchase certifying that the goods purchased are meant for sales to serving military personnel and ex-servicemen directly - or through unit run Canteens" has been put at serial No. 43 in Schedule 'A' meant for tax free items, and entry regarding "sales made by Canteen Stores Department to serving military personnel and ex-, servicemen directly or through unit run canteens" has been put at serial No. 100-A in Schedule 'B' meant for items taxable at Vat rate of 5.5 percent.”

Effect from 05.09.2012

            Now sale made to CSD will be tax free subject to the condition of certificate duly signed and stamped by the officer authorized to make purchase certifying that the goods purchased are meant for sales to serve military personnel and ex-servicemen directly or through unit run Canteens is inserted as entry at serial no. 43 in Schedule A (Schedule A of the Punjab Value Added Tax Act, 2005 deals with tax free items) and sales made by Canteen Store Department for Serving military personnel and ex servicemen directly or through unit run canteens is inserted as entry at serial no. 100-A in Schedule B (Schedule B of the Punjab Value Added Tax Act, 2005 deals with taxable goods on which Rate of Tax is 5.5 percent Plus Additional Tax)

2.         Change in Rate of Tax on shoes including moulded plastic footwear, hawai chappals and straps thereof, plastic footwear and hand crafted footwear

As per Public notice,

“in Schedule 'B' serial Nos. 72, 84 and 139 and the entries relating thereto have been omitted, and now entry regarding shoes including moulded plastic footwear, hawai chappals and straps thereof, plastic footwear and hand crafted footwear not  exceeding Rs. 250/- have been put in schedule 'B' meant for tax rate of 5.5 percent. Therefore, above noted items exceeding Rs. 250/- have now been put in schedule 'F' meant for VAT rate of 13 percent.”

Effect from 05.09.2012

Now shoes including moulded plastic footwear, hawai chappals and straps thereof, plastic footwear and hand crafted footwear not exceeding Rs. 250 are taxable at the rate of 5.5% plus additional tax which results in 6.05% and if the price of these items exceeds Rs. 250/- are taxable at the Rate of 13% plus additional tax which results in 14.30%.

3.         Now brick kiln owners are liable to pay double tax on the determined slabs.

As per Public notice,

Lumpsum tax payable in lieu of tax by the brick kiln owners has been doubled for each category having same capacity of kiln.

Effect from 05.09.2012

That under the Punjab Value Added Tax Act, 2005, the Govt. has doubled the tax payable by the brick kiln owners on lump sum basis.

4.         Annual Processing Fee of Rs. 800 levied on all taxable persons which is to be deposited in the month of October along with Quarterly Return (2^nd Quarter)

As per Public notice,

 Rules 40-A has been added to the Punjab VAT Rules, 2005 as per which "Every taxable person shall pay annual processing fee of Rs. Eight Hundred only during the month of October Alongwith the filing of quarterly return. This processing fee is in lieu of operation, maintenance and upgradation ol such facilities and services as electronic issuance of statutory forms, e-filing of returns, e-payment of taxes and such other online and offline services being rendered or proposed to be rendered by the Excise and Taxation Department."

Effect from 05.09.2012

That Punjab Govt. by virtue of Punjab Value Added Tax Act, 2005 has burdened the taxable persons to deposit annual processing fee of Rs. 800/- in the month of October which is to be attached with the Quarterly return. Here it is pertinent to point out that this processing fee is not applicable on TOT Dealers.

5.         Luxury Tax enhanced from 4% to 8%

As per Public notice,

 Under the Punjab Tax on Luxuries Act, 2008 rate of luxuries tax to be paid by hotels and marriage palaces has been increased from 4 percent to 8 percent

Effect from 05.09.2012

Now luxury tax paid by hotels and marriage palaces is 8% instead of 4%.

Authored by

J S Bedi Advocate
5/13, Central Town,
Behind Ajit Samachar
Jalandhar-144001. Punjab

Chamber No. 85

Punjab & Haryana High Court

Chandigarh
98140-66336
Email: bediadvocate@yahoo.co.in

www.bediadvocate.blogspot.in

NOTIFICATION ISSUED UNDER PUNJAB VAT ACT 2005 REGARDING CHANGE IN RATE OF TAX ON GOODS WHICH ARE SUBJECT TO VAT

Punjab Govt. in order to meet their Deficit Finance has enhanced the rate of Tax on taxable goods sold within the state of Punjab and sold to unregistered dealer under the Central Sale Tax in Inter State.

The effects of Notifications are discussed below: -

Effects of the Notification and Public notice are as under: -

1. Sugar: - The state Government is pleased to waive tax on Sugar w.e.f 03-09-     2012.

2. Increase in the rate of tax by 0.5% under the Punjab VAT Act 2005 w.e.f 03-09-   2012. Which resulted in increase, the details of same are as follows: -

A. The rate of Tax on Schedule B Goods has been increased from 5% to 5.5%    plus Additional Tax @ 10% and net effect from 03-09-2012 shall be 6.05% (5.5% + Additional Tax = 6.05%)

B. The rate of Tax on declared goods as mentioned in Schedule C-1 has been increased from 4% to 4.5% plus Additional Tax @ 10% and net effect from 03-09-2012 will be 4.95%. It is pertinent to clarify that  on wheat, paddy and rice, there is no change in the rate of Tax w.e.f 03-09-2012 and the previous rate of Tax i.e. 5% will prevail, reason being maximum ceiling rate on declared goods is 5%.

C. The rate of Tax on items mentioned in Schedule D has been increased from 20% to 20.5% + Additional Tax @ 10%. net effect shall be 22.55%

D. The rate of Tax on items mentioned in Schedule E i.e.

Diesel other than premium Diesel: - 8.75% + Additional Tax @ 10 % net effect shall be 9.625%

Petrol: - 28%   + Additional Tax @ 10 % net effect shall be 30.80%

Plastic Granules, Plastic Powder, master batches: - 8.5% + Additional Tax @ 10 % net effect shall be 9.35%

Spectacles, goggles, sunglasses, parts and lens cleaners: - 8.5% + Additional Tax 10% net effect shall be 9.35%

UPS: - 8.5% + Additional Tax @ 10% net effect from 03-09-2012 shall  be 9.35%

Inverter: - 8.5% + Additional Tax @ 10% net effect from 03-09-2012 shall be 9.35%

Cell phones including all parts and accessories such as Head Phone, Data Cable, Mobile Charger, Memory Card, Ear Phone, Audio Device, Mobile Battery, Bluetooth and Mobile Holder :- 8.5% + Additional Tax @ 10% net effect shall be 9.35%.

E. The rate of Tax on the Residuary entry i.e. schedule F of Act, (goods not mentioned in any other schedule), has been enhanced from 12.5% to 13% + Additional Tax @ 10% net effect from 03-09-2012 shall be 14.30% (13% + Additional Tax  @ 10%).

     

F. The rate of Tax on Pre-owned cars having engine capacity not exceeding 1000 cc is Rs 3000 per car on the first sale by the dealer.

And for the capacity exceeding 1000 cc is Rs 5000 per car on the first sale by the dealer.  

G. The purchase Tax on Sugarcane shall be 3% + Additional Tax @ 10% net effect shall be 3.3%.  

H. The rate of Tax on Liquefied Petroleum Gas for domestic use shall be 4% + Additional Tax @ 10% net effect shall be 4.4%.

Taxability on BOT Contracts

Taxability on BOT Contracts

Authored by… J S BEDI Advocate

5/13 Central Town

Jalandhar, Punjab

Email ID: bediadvocate@yahoo.co.in

Contact Number: 98140-66336

In today’s Global Economy BOT Contracts are playing vital role in the Development of infrastructure but there is no proper legislation and pronouncements which clarifies the status of taxability on these type of transactions it is sorry to point out that tax authorities in their enthusiasm to generate more revenue are trying their level best to cover these types of transactions in the category of works contract whereas infact in my opinion these transactions are outside the perview of taxability under the works contract.

The nature of BOT Contracts does not fit in to the fundamentals of goods taxation qua for the reason there is no transfer of property in goods beside this there is no element of sale is involved as for sale there must be transfer of goods for cash, deferred payment or other valuable consideration and sale price is the amount of valuable consideration received or receivable for any sale so in the absence of basic ingredients of sale it can be safely considered that BOT Contracts cannot be taxed under the category of works contract beside this here it is pertinent to point out that the purpose of these types of contract is not to purchase goods as movable or immovable, the main objective is to build or improve the infrastructure for furtherance of Economic growth and development without any financial burden on the grantor as in the BOT Contracts, concessionaire never build the infrastructure merely for the purpose of Construction and transfer rather their aim is to enjoy the fruits of infrastructure for a specified period in shape of Toll Tax or User fee so by no stretch of imagination there is a deemed sale by virtue of which tax can be attracted under the Punjab Value Added Tax Act, 2005

At this juncture, it will be useful to refer to the Relevant Section of Punjab VAT Act, 2005.

Section 2 (zf) of Punjab VAT Act, 2005 define “Sale” as:-

“Sale” with all its grammatical or cognate expressions means any transfer in goods for cash, deferred payment or other valuable consideration and includes:-

(i)                              Transfer, otherwise than in pursuance of a contract, of property in any goods for cash, deferred payment or other valuable consideration;

(ii)                            Transfer of property in goods (whether as goods or in some other form) involved in the execution of a works contract;

(iii)                           Delivery of goods on hire-purchase or any system of payment by installments;

(iv)                          supply of goods by any unincorporated association or body of persons to a member thereof for cash, deferred payment or other valuable consideration;

(v)                            supply, by way of or as part of any service or in any other manner whatsoever, of goods or any drink (whether or not intoxicating) where such supply or service is for cash, deferred payment or other valuable consideration; and

(vi)                          every disposal of goods referred to in Explanation (4) to clause (t) of this section;

and such transfer, delivery or supply of any goods shall be deemed to be a sale of these goods by the persons making the transfer, delivery or supply to a person to whom such transfer, delivery or supply is made, but does not include a mortgage, hypothecation, change or pledge.

Similarly, the definition of “Sale price” is given in section 2 (zg) as:-

“sale price” means the amount of valuable consideration received or receivable by a person for any sale made including

any sum charged for anything done by the persons in respect of the goods at time of or before the delivery thereof;

Explanation:-

(1)                           In relation to the transfer of property in goods (whether as goods or in some other form) involved in the execution of works contract, ‘sale price’ means such amount as is arrived at by deducting from the amount of valuable consideration paid or payable to a person for the execution of such works contract, the amount representing labour and other charges incurred and profit accrued  other than in connection with transfer of property in goods for such execution. Where such labour and other charges are not quantifiable, the sale price shall be the cost of acquisition of the goods and the margin of profit on them plus the transferring the property in the goods and all other expenses in relation thereto till the property in such goods, whether as such or in the other form, passes in a different form, it shall include the cost of conversion.

(2)                                       In relation to the delivery of goods on hire purchase or any system of payment by installments, the amount of valuable consideration payable to a person for such delivery.

(3)                                       In relation to transfer of right to use any goods for any purpose (whether or not for specified period), the valuable consideration received or receivable such transfer.

(4)                                       The amount of duties levied or leviable on goods under the Central and Salt Act, 1944 (1 of 1944), or the Customs Act, 1962 (52 of 1962), or the Punjab Excise Act, 1914 (1 of 1914), shall be deemed to be part of the sale price of such goods, whether such duties are paid or payable by or on behalf of the seller or the purchase or any other person.

(5)                                       Sale price shall not include tax paid or payable to a person in respect of such sale.

There is no consideration which is basic ingredient of sale transaction

In the BOT Contracts valuable consideration is missing which is essential ingredient for Sale as the Hon’ble judges of Kerla High Court held while deciding the case of Rama Vs. STO (1993) 91 STC 216. whereas Further the definition of work contract under section 2 (zu) of PVAT Act, 2005. Also talks about valuable consideration  “works contract” included any agreement for carrying out, for cash, deferred payment or other valuable consideration.  Building, construction, manufacturing, processing, fabrication, erection, installation, filling out, improvement, modification, repairs or commissioning of any movable or immovable property. But with respect to the BOT Contracts there is no receipt of any deferred payment or valuable consideration. Receipt made on account of toll has nothing to do with cost of the project. In the guise of definition of deferred payment, which is not definite, amount of toll cannot be regarded as sale price. Beside this the very nature of this transaction doesn’t fit into the fundamentals of goods taxation. Apparently because there is no transfer of property in any goods so there could be no liability to either work contract tax under the PVAT Act.

BOT Contracts are infact in the nature of enjoyment of immovable property

 Here it is worth while to mention that the transaction is in the nature of enjoyment of the immovable property and not works contract. As this view was held by the judges of Hon’ble Supreme Court of India, while delivering the judgement of Titaghur Papers Mills Co. ltd. (1985) 60 STC 213 followed by the Karnataka High Court in Muninagaiah (1997) 106 STC  294 and the Madras High Court in Tamilnadu Magnesite Limited (2007) 9 VST 360 it will be interesting to find if the BOT transaction could be held as a profit prendre that is granting a pure and simple conferment of a right to be exercised in the projects site accompanied by a right to collect a toll or fees for users of lanes constructed. In the Titagarh case it was held that any attempt on the part of state government to tax the amount payable under the contracts would be unconstitutional as being beyond the taxing power of the State Legislature under entry 54 of list II of the seventh Schedule of the constitution of India. And the similar view was also up held in the judgement of Muninagaiah as well as in the Tamilnadu Magnesite. So the question of Taxability on BOT Contracts does not arise.

Concessionaire will not transfer the property even after the completion of specified period rather it is a case of handing over the site

 

The Project will be owned by concessionaire for a specified period and thereafter the same will be handed over and no transfer is involved. It is not disputed that concessionaire will be the owner of the property erected on the site for a specific period.

Concessionaire will be treated as owner even under the Income Tax Act and entitled for claiming the Depreciation

Here it is pertinent to point out that depreciation under the applicable laws on the property representing the capital investment made by the concessionaire in the project shall be allowed to the concessionaire.

Concessionaire has to insure the property at its own costs and expenses as if the owner of the property   

In BOT Contracts it was observed that concessionaire has to insure the property at its own costs and expenses as the owner of the property so under these circumstances it can be safely said that concessionaire enjoys the fruit for a specified period and will remain as a owner for a specified period and thereafter the same will be handed over.

Conclusion:

As per my opinion it can be safely concluded that BOT Contracts cannot be taxed under the category of works contract as the transaction neither involves sale or transfer of property in goods nor valuable consideration is involved so by no stretch tax can be levied and any attempt to tax the transaction was beyond the states power under entry 54 in list II of the Seventh Schedule of the Constitution of India. Although commissioner Punjab while deciding the application u/s 85 (Advance Ruling) has given the verdict in case of M/s Chetak Enterprises P Ltd. Vs. State of Punjab that BOT transactions are covered under the category of works contract and are subject to tax under the Punjab Value Added Tax Act, 2005 but an appeal against the order of commissioner is still pending before the Hon’ble Punjab VAT Tribunal

Extension given by Commissioner Punjab for AY 2007-08 for framing an assessment was quashed by the Ho'ble Tribunal..