CA Shyam Saboo

1. Concept of “fair market price” is being introduced. It is proposed to give powers to assess a dealer on the basis of fair market price if goods are sold below market price with intention to evade tax.

2. Registration of dealer shall be cancelled if false documents are submitted for obtaining registration

3. Dealers can file revised return multiple times before due date for filing of audit report

4. Returns of dealer filed within prescribed date shall be deemed to have been accepted after the expiry of period of 4 years if notice is not issued till then

5. TDS

i. Employer awarding contract shall be liable to obtain registration for TDS and return containing TDS details shall be filed by the employer.

ii. If principal contractor awards the contract to sub-contractor, then the credit of the TDS can be transferred by the contractor to the sub-contractor

6. Advance Ruling Authority is being made to make application before or after entering a transaction on disputed question

7. It is proposed to obtain information from e-commerce companies regarding sales and purchases transactions made on the portal. Penalty shall be imposed on portal for not furnishing the information.

8. It is proposed to levy entry tax on marble and granite slabs

9. Profession Tax

i. Un-enrolled persons under PT Act applying for enrolment between 01/04/2016 to 30/09/2016 and also enrolment application pending on 01/04/2016, will not have to pay PT and penalty for period exceeding previous 3 years prior to application

ii. Armed members of CRPF and BSF shall be exempted from PT

iii.      Aided educational institutions who have not filed mandatory e-returns will be exempt from paying late fees

10. Sugar cane purchase tax shall be exempted for the year 2015-16 for those sugar factories who meet the export obligations as per government policy

11. Lottery tax is enhanced as follows:

Type of lotteryExisting TaxNew Tax proposed
Weekly draw lottery60,00070,000
Fortnightly draws or draws held between week and fortnight1,25,0001,50,000
Monthly draws or draws held between fortnight and monthly2,50,0003,50,000
Bumper Lottery Scheme12,00,00014,00,000

12. General rate of tax on goods, except declared goods, is proposed to be enhanced from 5% to 5.50%

13. Rate of tax increased on petrol and diesel and some other items which were increased on 01/10/2015 shall continue to be the same for 1 more year.

14. Reduction in vat rate:

Tax rate is proposed to be reduced from 12.50% to 5.50% on following products:

i. Barbed wire, wire mesh and chain links

ii. Pyrolysis Oil produced by processing plastic waste and other organic waste

iii. LED tubes

iv. Pencil Box, all types of gum, glues and sticks, stapler pin, tape dispenser, duster and all types of files.

v. Sale of used vehicles by banks and financial institutions for only such vehicles on which sales tax or entry tax has been paid at the earlier stage

vi. Sterile water for injection

15. New Exemptions:

Following goods are proposed to be exempt from tax:

i. Activity of Warping and sizing on yarn

ii. Buses operated on battery or hybrid fuel used for public transport and which are proposed by public transport undertakings

iii. Retrofit kit for vehicles of differently abled persons

iv. Medicines and instruments for dialysis

v. Mammography machines used for detection of breast cancer

vi. Bamboo handicraft products, except, bamboo furniture

vii.     Exemption from CST is proposed on the resale of goods brought from outside the state and packed or repacked inside the logistics hub.

16. Clarifications:

Tax rate on sweet corn is proposed to be 5.50%

17. Increase in tax rates:

Rate of tax is increased on following products:

i. Coconut oil sold in packaging upto 500 ml is proposed to increase from 5% to 12.50%

ii. Tax of 5.50% is proposed on terry towels mainly used in hotels.

18. Hair oil shall be excluded from the entry of drugs

19. Tax rate on tea shall be 5.50% upto 31.03.2017

20. Tax @ 2% on cotton seed is proposed

21. Composition scheme

i. Yearly turnover limit for retailers is enhanced from Rs 50 Lacs to 1 crore

ii. Under composition scheme for bakeries it is proposed to exclude turnover of tax free goods

iii. Rate of composition for hotels, restaurants, etc is proposed to be increased to 8% if the turnover of food and non-alcoholic drinks in previous year has exceeded Rs. 3 crores

22. Set-off:

i. No set off on entry tax paid on purchase of diesel and petrol

ii. Set off on mobile handsets purchased locally shall be eligible to the extent of the liability under CST Act on their sales

iii.     Set off on passenger motor vehicle will be available to the extent of output tax on
lease of such vehicles

23. Pilot project of digital billing is proposed for the registered dealers selling at the last stage

24. Amnesty scheme

Applicable to

i. Dealer who has filed an appeal and the recovery of disputed dues is stayed by the appellate authority

ii. Dealer withdraws the appeal

Conditions:

i. For the periods before 01.04.2005 – Dealer pays the disputed tax in full, then the corresponding interest and penalty shall be waived

ii. For the periods from 01.04.2005 to 31.03.2012 – Dealer pays the disputed tax amount and 25% of disputed interest, then the corresponding balance interest and penalty shall be waived.

iii. Amnesty can be availed even for the some of the issues pending in appeal

iv. Amnesty scheme shall be available from 01.04.2016 to 30.09.2016

(Author can be reached at shyam.saboo@gmail.com)

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Tags : Budget 2016 (434) MVAT (499) profession tax (42)

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