First Point Tax Levied On Few Commodities under Punjab Vat Act, 2005

FIRST POINT TAX LEVIED ON FEW COMMODITIES UNDER THE PUNJAB VAT ACT 2005 & SUBSEQUENT SALE IS TAX FREE W.E.F. 01^ST JANUARY 2014.

Punjab Excise & taxation department has issued a notification under the Punjab Vat Act 2005 which is applicable with effect from 01 Jan 2014, but strange rather shocking Excise & Taxation Department has issued the notification which reflects that tax was levied at the first stage that is in the hand of manufacturers and importers in the state of Punjab and after that no tax will be charged in the hands of distributors, wholesalers or retailers. It clearly infers that this notification is not as per the spirit of the Punjab Vat Act 2005 as the scheme of Punjab Vat Act 2005 no where permits the levy at first stage.

EFFECTS OF THE NOTIFICATION:

GOODS subject to the tax @ 14.5% & 22.5% have been notified and the surcharge at the rate of 10% will be separately leviable in terms of section 8-B of the Punjab Vat Act 2005 which ultimately resulted in increase of tax from 14.5% to 15.95% and from 22.5% to 24.75% which clearly reflects that with every sunrise Excise & taxation department is saddling the assesses with heavy tax liability without giving any prior notice as required under section 8(3) of The Punjab Vat Act 2005.

The Copy of the notifications is attached below by virtue of which commodities mentioned in the Schedule E from serial no 15 to 20 are subject to tax at first point of sale in the hands of manufacturer or first importers stage at the rates specified in the notification reflected in in Schedule E appendix to Punjab Vat Act 2005, here it is pertinent to point out that subsequent sale of these commodities will be considered as tax free & by virtue of this Schedule A which deals with tax free goods appendix to the Punjab Vat Act 2005 was also amended.

Applicability:

The amendments made by virtue of notifications no. S.O.116/P.A8/2005/S.8/2005/S.8/2013 & S.O 117/P.A.8/2005/S.8/2013 which deals with Schedule A & E of The Punjab vat Act 2005 are applicable from 1^st January 2014.

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Authored by

J S BEDI Advocate

Email ID: bediadvocate@yahoo.co.in

Contact Number: 98140-66336

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GOVERNMENT OF PUNJAB

DEPARTMENT OF EXCISE & TAXATION

(EXCISE AND TAXATION-II BRANCH)

NOTIFICATION

The 13th December, 2013

S.O.116/P.A8/2005/S.8/2005/S.8/2013 – 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 (3) of section 8 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 amendments in Schedule ‘A’, appended to the said Act, with effect from 1st January, 2014, by dispensing with the condition of previous notice, namely:-

AMENDMENT

In the said Schedule ‘A’, after serial No. 85, the following serial No. 86 to 91 and the entries relating thereto, shall be added. These 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.

 D.P. REDDY,

Financial Commissioner Taxation and

Secretary to Government of Punjab,

Department of Excise and Taxation

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GOVERNMENT OF PUNJAB

DEPARTMENT OF EXCISE & TAXATION

(EXCISE AND TAXATION-II BRANCH)

NOTIFICATION

The 13th December, 2013

NO S.O 117/P.A.8/2005/S.8/2013 – 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 (3) of section 8 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 amendments in Schedule ‘E’, appended to the said Act, with effect from 1st January, 2014, by dispensing with the condition of previous notice, namely:-

AMENDMENT

In the said Schedule ‘E’, after serial No. 14, the following serial No. 15 to 20 and the entries relating thereto, shall be added. These 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:-

D.P. REDDY,

 Financial Commissioner Taxation and

Secretary to Government of Punjab,

Department of Excise and Taxation