ADVANCE TAX LEVIED ON FIVE NEW ITEMS

ADVANCE TAX LEVIED ON FIVE NEW ITEMS W.E.F. 7^TH MARCH, 2014  UNDER THE PUNJAB VAT ACT, 2005

Punjab Government has levied advance tax on five new items in addition to the previous list of thirty items w.e.f. 7^th March, 2014. The list of the items added are mentioned below:

31. Plastic Fabric and Bags                       5.5%
32. Paper Board                                        5.5%
33. Brass                                                   5.5%
34. Nickel                                                 5.5%
35. Timber                                               5.5%

The copy of notification is reproduced for kind reference:

PUNJAB GOVT. GAZ. (EXTRA), MARCH 11, 2014
(PHGN 20, 1935 SAKA)
403
452/03-2014/Pb. Govt. Press, S.A.S. Nagar
PART III
GOVERNMENT OF PUNJAB
DEPARTMENT OF EXCISE AND TAXATION
(EXCISE AND TAXATION-II BRANCH)
NOTIFICATION

The 7th March, 2014 No.S.O.20/P.A.8/2005/S.6/Amd.(1)/2014.-Whereas the State Government is satisfied that circumstances exist, which render it necessary to take immediate action in public interest; Now, therefore, in exercise of the powers conferred by sub-section (7) of section 6 of the Punjab Value Added Tax Act, 2005 (Punjab Act No. 8 of 2005), and all other powers enabling him in this behalf, the Governor of Punjab is pleased to make the following amendment in the Government of Punjab, Department of Excise and Taxation, Notification No. S.O. 90/P.A.8/2005/ S.6/2013 dated the 04th October, 2013, namely:-

AMENDMENT

In the said notification, in the Table, after serial Number 30, and entry relating thereto, the following shall be added, namely:-

31. Plastic Fabric and Bags        5.5%
32. Paper Board                         5.5%
33. Brass                                    5.5%
34. Nickel                                  5.5%
35. Timber                                 5.5%
 

D.P. REDDY,
Financial Commissioner Taxation and
Secretary to Government of Punjab,
Department of Excise and Taxation

Registration / Amendment/ Cancellation Under The Punjab Value Added Tax Act, 2005

VAT system is to rationalize the tax burden and bring down in general the price level and to bring in simplicity and transparency in the tax structure thereby improving the tax compliances and eventually to ensure revenue growth and for that registration plays vital role and for obtaining the same certain documents and process is involved  it is an effort to compile all the provisions relating to liability, amendment, cancellation of registration under the Punjab Vat Act, 2005

Registration Liability

Who are Liable                                                        Turnover Exceeds

A Manufacturer                                                              1 Lac

A Person, running Restaurant or Hotel                            5 Lac

A person who is running a bakery                                  10 Lac

An Importer of taxable goods for sale or

use in Manufacturing activities within the

State                                                                              1 Lac

A Person who receives goods on

consignment or branch transfer basis from

within or outside the State on which no tax

paid under this Act                                                         1 Lac

A person liable to pay purchase tax under

Section 19                                                                      1 Lac

A person who wants voluntary registration                       10 Lac

A person dealing in taxable goods, who is

registered under the Central Sales Tax Act,

1956                                                                               Nil

Any other person for VAT                                              50 Lac

Any Person for TOT Registration                                    5 Lac

Detail of Documents required for New Registration Number under the Punjab VAT Act, 2005 and Central Sales Tax Act, 1956.

1.     Form VAT-1.

2.     Central Sales Tax Form.

3.     Rs.2, 000.00 for Registration Certificate Fee under Punjab VAT Act, 2005 &Punjab Municipal Fund.

4.     Surety Bond or Bank Guarantee.

a)     Under Punjab VAT Act, 2005 in favour of Excise & Taxation Officer- Cum- Designated Officer, Jalandhar.

b)    Under CST Act, 1956, Jalandhar.

c)     Each Rs. 50,000.00 ( Fifty Thousand Only)

5.     Affidavit.

6.     Purchase Bill outside the State as required under VAT & CST Act.

7.     4 Passport Size Photo.

8.     Proof of place of Business.

9.     Residence Proof of Person.

10.                        MOA and AOA in case of Company.

11.                        Bank Account of the Firm / Company.

12.                        Copy of PAN Card of the Firm / Company.

13.                        Partnership Deed in case of Partnership.

14.                        Nature of Business

a) Detail of Items required for manufacturing / resale / use in Work Contract.

Persons liable to register.

Section 21 (1) No person other than a casual trader, who is liable to pay tax under this Act, shall carry on business, unless he is registered under this Act.

(2) Every person required to be registered under sub-section (1), shall make an application for registration, within a period of thirty days from the date when such person becomes liable to pay tax under this Act, in the prescribed manner to the designated officer.

(3) If the designated officer is satisfied that the application for registration is in order, he shall, in accordance with such manner and on payment of such fee, as may be prescribed, register the applicant and grant him a registration certificate in the prescribed form:

Provided that if the designated officer is satisfied that the particulars contained in the application are not correct, or are incomplete or that any evidence or information required for registering the applicant, is not furnished, he may, after necessary inquiry and after giving the applicant an opportunity of being heard, reject the application for reasons to be recorded in writing.  However, the applicant may submit a fresh application for registration in accordance with the provisions of

this Act:

Provided further that during the pendency of an application for registration, he shall file return and pay the due amount of tax, in the prescribed manner.

(4) Where a person has contravened the provisions of sub-section (1), the designated officer shall, subject to action under section 52 or section 60, as the case may be, register such person and grant him a registration and such registration shall take effect as if, it had been granted under sub-section (3) on the application made by the person.

(5) When any person, who was registered before the appointed day under the repealed Act, and continues to be so registered on the day, immediately before such appointed day, and is liable to pay tax under this Act on such appointed day, the designated officer shall, within thirty days of receipt of application in the prescribed form, issue to such person, in the prescribed manner, a fresh registration under this Act for VAT or TOT, as the case may be.

(6) For the purpose of identification of taxpayers, the Commissioner or the  designated officer, shall issue a VAT Registration Number ( hereinafter in short referred to as VRN) to every taxable person and TOT Registration Number (hereinafter in short referred to as TRN) to every registered person.

(7) Every taxable person or a registered person, who is allocated a registration number, shall mention his VRN or TRN, as the case may be, in all returns, forms or any other documents, used for the purposes of this Act.

(8) Every person, who is liable to pay tax, and who is a Hindu undivided family or an association of persons, club or society or firm or company or, who is engaged in business as the guardian or trustee or otherwise on behalf of another person, shall make a declaration to the designated officer, stating the name of the person or persons, who shall be deemed to be the manager or managers of such person’s business for the purposes of this Act.

(9) Save as otherwise provided in section 77, a registration, granted under this Act, shall be personal to the person to whom it is granted and shall not be transferable.

Voluntary registration for VAT

Section 22

(1) Subject to the provisions of sub-section (3) of section 6, any person except one dealing exclusively in goods declared tax-free under section 16, may apply in the prescribed manner to the designated officer for registration under this Act.

(2) The provisions of sub-sections (2), (3) and (5) of section 21, shall apply in respect of applications for registration under this section.

(3) Every person, who has been registered upon application made under this section shall, for so long as his registration remains in force, be liable to pay tax under this Act whether his gross turnover exceeds the taxable quantum or not.

Amendment of registration.

23. The designated officer may from time to time, by order in writing, amend registration on information furnished under section 76.

Cancellation of registration

24. (1) The designated officer may, on an application made to him, or otherwise, by an order in writing, cancel registration, on -

(a) an information received that a business, in respect of which a registration was granted under sub-section (3) of section 21, has been discontinued; or

(b) an information received that the person has violated any of the provisions of this Act or the rules made there-under; or

(c) non-filing of return or non-payment of due tax under this Act; or

(d) any other sufficient cause including misuse of the registration or cessation of liability to payment of tax under this Act; or

(e) the registration granted under the Central Sales Tax Act, 1956, to a person liable to pay tax by virtue of the provisions of section 7, but who is not otherwise liable to pay tax under section 6, has been cancelled.

(2) Where registration is cancelled under this section without making an application by the person concerned, no order for such cancellation shall be passed by the designated officer, without affording an opportunity of being heard.

Security from certain classes of persons.

25. (1) Every person applying for registration under this Act, shall furnish a security of rupees fifty thousand in the manner, prescribed for securing proper and timely payments of tax or any other sum, payable by him under this Act:

Provided that the security already furnished by a person registered under the repealed Act, shall be deemed to have been furnished under this Act.

(2) The designated officer granting registration, may, on application made by a person for release, discharge or refund of the security, order the release, discharge or refund of the whole security or any part thereof, furnished by him, if the same is not required

Explanation.- The designated officer shall not be required to retain security or surety furnished by a person on behalf of a taxable person or registered person, if the registration of such a person has been cancelled under this Act and nothing remains due against such a person.

(3) Where it appears expedient to the designated officer, granting registration, so to do, for the proper realisation of, tax payable under this Act, he may, at any time while such certificate is in force, by an order in writing and for reasons to be recorded therein, require the person, to whom the registration has been granted, to furnish within such time, as may be specified in the order and in the prescribed manner, such additional security, not exceeding rupees two lac in addition to the security, furnished under sub–section (1), as may be specified in the order, for the aforesaid purpose:

 (4) The designated officer, granting the registration, may, by an order in writing, for good and sufficient cause, forfeit or realise the whole or any part of the security or additional security furnished by a person for recovery of any amount of tax or penalty due or payable by a person:

Provided that no order shall be passed under this sub-section without giving the person concerned, an opportunity of being heard.

(5) In case the security is rendered insufficient because of the order made under sub–section (4), the person concerned shall furnish further security to make up for the amount, which has fallen short, in such manner and within such time, as may be prescribed.

First point tax levied under the Punjab VAT, 2005 on number of other commodities with effect from 01.03.2014

Excise and Taxation department has issued notification no. S.O 17/P.A.8/2005/ S.8/2014 dated 21.02.2014 which is effective from 01.03.2014. This is another notification beside the notification issued on 13.12.2013 effective from 01.01.2014 By virtue of this notification, List of commodities are increased in Schedule E and Schedule A beside amendment in Schedule B. In other words, the scope of levy of First stage tax was increased as department is trying to collect the tax in the hands of Manufacturer and Importer and thereafter subsequent seller will treat the same goods as tax free goods. These type of notification is creating ambiguity in the trade circle as number of dealers who are having the stock on 28^th Feb, 2014 is to maintain and segregate the stocks as per different dates/periods beside this it is strange and astonishing that the same goods are taxable in the hands of one taxable person and tax free in the hands of another taxable person. It clearly reflects that Excise and Taxation Department has unable to maintain the stability in the VAT System and switched over to the notifications which levy the tax on First stage inspite of the fact it is against the basic spirit of the Punjab VAT, 2005

AMENDMENT

EFFECTIVE DATE : 01.03.2014

1. IN THE SAID SCHEDULE “A”

 (a) in serial No. 50 and the entries relating thereto, for bracket and words “(Halwai goods only), the bracket and words “(Halwai Goods except branded snacks)” shall be substituted;

 (b) for serial No. 87 and the entries relating thereto, the following serial Nos.

and the entries shall be substituted, namely:-

 “The following commodities shall be tax free at the wholesaler or distributor or retailer stage provided that tax has already been paid at the first point of sale i.e manufacturer or first importer’s stage:-

 (i) All types of Televisions, Refrigerators, Washing Machines, Microwave ovens, Oven Toaster Grillers (OTGs), Home Theatres, Air Conditioners, Heaters, Blowers, Vaccum Cleaners, Music Systems including CD players, VCD players, DVD players, ROs and Water Purifiers, Dish Washers and Geysers;

 (ii) Kitchen Appliances i.e sandwich makers, tea/coffee makers, juicer mixer grinders (JMGs), hand blenders, electric rice cookers, electric tandoors, induction cook tops, electric chimneys and electric fryers;

 (iii) Cold Drinks, Aerated Drinks and Soda;

 (iv) All types of personal care products i.e deodorants, shaving products, beauty soaps, shampoos, hair oil, conditioners, serums, hair care products, tooth pastes, hand wash, body wash, beauty products, hair gels, bathing gels, talcum powders, creams, anti-persiprants, petroleum jellies, baby care products, skin care lotions, sanitary napkins, after shaving lotion and tooth brush;

 (v) All types of soaps and detergents i.e washing bars and soaps, fabric softeners, bleach, gentle wash, dish wash, color care and Neel;

 (vi) All types of branded and packaged food products i.e chips, wafers, chocolates, toffees, chewing gums and bubble gums, ice creams, Breakfast Cereals, Muesilli, Corn Flacks, pasta, macroni, biscuits, frozen desserts, frozen ready to eat products, meal makers, instant soups , instant noodles, ready to eat products, custard powder, bakery products, baby foods, coffee powder, ice tea, coffee premix, tea premix, jellies, ketchup and spreads;

 (vii) Mineral Water;

 (viii) Processed fruits and vegetables i.e Fruit jams, pickles, fruit squash, paste, fruit drinks, fruit juice (whether in sealed container or otherwise);

 (ix) Roasted or fried grams and groundnuts, namkeens and branded snacks;

 (x) Branded Honey;

 (xi) Branded Atta, Maida, Suji and Besan;

 (xii) Branded Cottage Cheese (Paneer), processed cheese including mozzarella, parmesan and other varieties of processed cheese;

 (xiii) Desi Ghee;

 (xiv) Edible Oils, Vegetable Oil including gingili oil and bran oil;

 (xv) Sweetened Flavored Milk;

 (xvi) Tea excluding Green tea;

 (xvii) Coffee beans and seeds, cocoa pod and chicory;

 (xviii) Drugs and medicines including vaccines, syringes and dressing, mediated ointments produced under drug license, light liquid paraffin of IP and other grades, medical equipments/devices and implants;

 (xix) Branded Spices of all varieties and forms including cumin seed, aniseed, turmeric and dry chillies;

 (xx) Mosquito repellants, toilet cleaners, wood preservatives, chemicals for killing domestic insects, termicides, phenyl and similar other products, which are not used for agricultural purpose;

 (xxi) Tissue papers;

 (xxii) Cups and glasses of paper and plastic;

 (xxiii) Branded Vermicilli. and

 (c ) Serial Nos. 88, 89, 90, 91 and 92 and the entries relating thereto shall be

omitted.

2. IN THE SAID SCHEDULE “B”

 (a) in serial Nos. 12, 21, 29, 31, 33, 41, 88, 98, 109, 117, 127, 155, 156, and

159 and the entries relating thereto, shall be omitted;

 (b) in serial No. 26 and the entries relating thereto, for the words and brackets “cottage cheese (paneer)”, the words and brackets “unbranded cottage cheese (paneer), shall be substituted;

 (c ) in serial No. 48 and the entries relating thereto, for the word “honey”, the words “unbranded honey” shall be substituted;

 (d) in serial No. 81 and the entries relating thereto, the words “tissue paper”

shall be omitted; and

 (e) in serial No. 165 and entries relating thereto, for the words and brackets sevian (Vermicilli), the words and brackets “unbranded sevian (vermicelli)” shall be substituted.

3. IN THE SAID SCHEDULE “E”

(a) for Serial No. 15 and the entries relating thereto, the following serial No.

and the entries shall be substituted namely:-

 These following commodities shall be taxable at the first point of sale i.e

manufacturer or first importer’s stage, at the rates specified against these entries in

the Table given below, namely:-

Sr. No	Commodity Name	Rate of Tax
1	All types of Televisions, Refrigerators, Washing Machines, Microwave ovens, Oven Toaster Grillers (OTGs), Home Theatres, Air Conditioners, Heaters, Blowers, Vaccum Cleaners, Music Systems including CD players, VCD players, DVD players, ROs and Water Purifiers, Dish Washers and Geysers	14.5 per cent
2.	Kitchen Appliances i.e sandwich makers, tea/coffee makers, juicer mixer grinders (JMGs), hand blenders, electric rice cookers, electric tandoors, induction cook tops, electric chimneys and electric fryers	14.5 per cent
3.	Cold Drinks, Aerated Drinks and Soda	22.5 per cent
4.	All types of personal care products i.e. deodorants, shaving products, beauty soaps, shampoos, hair oil, conditioners, serums, hair care products, tooth pastes, hand wash, body wash, beauty products, hair gels, bathing gels, talcum powders, creams, anti- persiprants, petroleum jellies, baby care products, skin care lotions, sanitary napkins, after shaving lotion and tooth brush	14.5 per cent
5.	All types of soaps and detergents i.e washing bars and soaps, fabric softeners, bleach, gentle wash, dish wash, color care and Neel	14.5 per cent
6.	All types of branded and packaged food products i.e chips, wafers, chocolates, toffees, chewing gums and bubble gums, ice creams, Breakfast Cereals, Muesilli, Corn Flacks, pasta, macroni, biscuits, frozen desserts, frozen ready to eat products, meal makers, instant soups , instant noodles, ready to eat products, custard powder, bakery products, baby foods, coffee powder, ice tea, coffee premix, tea premix, jellies, ketchups and spreads	14.5 per cent
7.	Mineral water	14.5 per cent
8.	Processed fruits and vegetables i.e Fruit jams, pickles, fruit squash, paste, fruit drinks, and fruit juice (whether in sealed container or otherwise)	6.25%
9.	Roasted or fried grams and groundnuts, namkeens and branded snacks	6.25%
10.	Branded Honey	6.25%
11.	Branded Atta, Maida, Suji and Besan	6.25%
12.	Branded Cottage Cheese (Paneer), processed cheese including mozzarella, parmesan and other varieties of processed cheese	6.25%
13.	Desi Ghee	6.25%
14.	Edible Oils, Vegetable Oil including gingili oil and bran oil	6.25%
15.	Sweetened Flavored Milk	6.25%
16.	Tea excluding Green tea	6.25%
17.	Coffee beans and seeds, cocoa pod and chicory	6.25%
18.	Drugs and medicines including vaccines, syringes and dressing, mediated ointments produced under drug license, light liquid paraffin of IP and other grades, medical equipments/devices and implants	6.25%
19.	Spices of all varieties and forms including cumin seed, aniseed, turmeric and dry chillies	6.25%
20.	Mosquito Repellants, toilet cleaners, wood preservatives, chemicals for killing domestic insects, termicides, phenyl and similar other products, which are not used for agricultural purposes.	6.25%
21.	Tissue Papers	6.25%
22.	Cups and glasses of paper and plastic	6.25%
23.	Branded Vermicilli	6.25%

(b) in serial Nos. 16, 17, 18, 19 and 20 and the entries relating thereto shall

be omitted.

CONCLUSION

The highlighting feature of this notification is not only to levy the tax at first stage in the hands of manufacturer and importer rather subsequent sale is also made tax free beside this in some entries pertaining to Schedule B scope was extended as the entry pertains to “Halwai” goods, Cottage cheese, Honey and sevian also covers the unbranded category. So it can be safely inferred that day by day Excise and Taxation Department is increasing the scope and rate of tax this ultimately results in increase in prices.

Authored by

J S Bedi Advocate

Office at Jalandhar:
5/13, Central Town, Jalandhar-144001.

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Street no. 5, Friends Colony, Jassian Road, Jalandhar Byepass, Ludhiana

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