• Sep
  • 06
  • 2012

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

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 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 of 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 (2nd 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%.

Download Public Notice

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Authored by

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


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