Trade Cir. No.37 T of 2009, Mumbai, 30/12/2009
Sub : Amendment to the Maharashtra Value Added Tax Rules, 2005.
Ref. : Government Notification No. VAT.1509/CR-16/Taxation-1 dated 18th June 2009.
The Maharashtra Value Added Tax Rules, 2005 have been amended by the Government Notifications cited at reference. The required notification is published in the Official Gazette dated 18th June 2009.
The salient features of the amendments are briefly explained below:
(1). Amendment to rule 17: The various sub-rules contained under this rule are amended.
(I). Amendment to sub-rule (1):
(a).Amendment to replace words “Return-cum-chalan” with the word “Return”
(i). The sub-rule (1) provides the different forms of returns to be filed by various categories of dealers. Earlier, the dealers. used to submit these forms of return-cum-challan physically either to the Bank alongwith payment of tax, interest etc., if any or to the Sales Tax Department where tax liability was NIL. These forms of the return were return-cum-challan.
(ii). From 1st February 2008, Sales Tax Department has implemented the Scheme of filing returns electronically in phased manner. As a result, every dealer is required to make the payment of tax, interest etc., in challan Form-210 and upload return electronically. Hence, a technical amendment is made and for the words “Return-cum challan” are replaced the word “Return”.
(b). Amendment to description of the Return Form-235:
(i). Earlier, return Form-235 was filed only by the Notified Oil Companies. However, there are some dealers who are not ‘Notified Oil Companies’ but effect the sales or purchases of the Motor Spirit. Such types of dealers were facing difficulties in filing returns in respect of their turnover of Motor Spirits.
(ii). To overcome this, an amendment is carried out. Now, in addition to the Notified Oil Companies the dealers effecting the sales of Motor Spirits are also liable to file Return in Form-235.
(II). Amendment to sub-rule (5):
(a) As explained earlier the Department has successfully implemented the Scheme of filing returns electronically. Further the Department is providing number of other e-services. To avail the benefits under e-services the dealers are required to get e-enrolled with the Department’s Web-site.
(b) Earlier, as per clause (d) of rule 17(5) it was mandatory for every dealer to submit to the Department the copy of the acknowledgment of filing of e-return. By Trade Circular No. 4T of 2009 dated 23rd January 2009 this condition was done away with. To give effect to this, the clause (d) of rule 17(5) is amended with effect from 1st January 2009.
(c) The amendment now provides that such e-enrolled dealer is not required to submit the copy of the acknowledgment whenever he files an e-return.
(d) However, the said amendment does not waive the requirement of e-enrollment for availing e-services and submission of its acknowledgment to the department. Therefore, newly registered dealers and those who have yet not e-enrolled themselves have to get e-enrolled and submit their acknowledgments of e-enrollment to the department.
(III). Amendment to sub-rule (6):
(a) In view of the fact that now, every dealer is required to file return electronically; it becomes necessary to adopt certain security measures. Keeping this in mind a new sub-rule is added With effect from 1st January 2009.
(b) The dealers have enrolled themselves with the website www.mahavat.gov.in for availing the benefits of e-services including filing of e-returns by using their PAN as a password, and if, they have either continued to use PAN as their password or created a new password for filing e-returns, then as a result of current amendment it will be presumed that the said dealer has verified the truthfulness and correctness of the contents of electronic returns so filed.
(2). Amendment to rule 17A:
(a) You are well aware that at present the Department provides e-services like e-return, e-declaration, e-registration, submission of refund application electronically and Form-704. In a move towards the further automation the Department has decided to provide other e-services viz., e-annexure and e-Form-801 etc.
(b) To improve the effective compliance and compatibility with the automated system, the existing forms, “applications, notices etc. require certain changes. In view of this, the new sub-rule empowers the Commissioner to amend the existing forms, applications, declarations, notices or any document or to introduce new forms, applications or any document to be submitted electronically.
(c) Hence, hereinafter the necessary amendments to existing forms, applications, declarations, notices etc. will be carried out by publishing the same in the Official Gazette.
(3). Amendment to rule 20(2):
(a) Rule 20 deals with completeness and correctness of the return filed by the dealer.
(b) The sub-rule (2) is amended to provide that if dealer fails to file returns as per the periodicity specified in rule 17 or rule 18 then such return shall not be treated as complete and self consistent return.
e.g. If a dealer liable to file monthly returns, instead files the returns Quarterly or Six-monthly, then such returns will not be considered as correct and complete returns.
(4). Amendment to rule 40:
(I). Amendment to sub-rule (1)(a):
(a) The clause (a) of sub-rule (1) of rule 40 deals with the payment of Tax Deducted at Source (TDS) by the employers. The payment of tax so due and deductible was required to be paid with the use of Return-cum-challan in Form-405 within 21 days from the expiry of the month during which TDS is required to be deducted. Employers are also required to file return in Form-405 within the three months from the end of the year to which such return relates.
(b) At present, in every case other than payment for TDS, the dealers are required to make the payment with use of chalan in Form-210 within prescribed time, and file return electronically.
(c) In near future the Department plans to get the Form-405 filed electronically. In view of this the Chalan part of the Form-405 is deleted. Therefore, hereinafter the payment on account of TDS is to be made only in challan Form-210.
(d) However, existing challan in Form-210 does not provide the space for TDS. Hence, the dealers are advised that till the requisite amendment is made to the Challan in Form-210 a separate row may be inserted after row (g) as “(i) TDS)” and the amount of TDS may be written in that Box.
(II). Amendment to sub-rule (1)(d):
(a) The clause (d) of rule (1) is amended so as to provide that the dealer shall file a return in Form-405 (instead of Return-cum-chalan in Form-405) within three months from the end of the year to which such return relates.
(b) Such Form-405 is to be filed,
(i).in Mumbai, with the Joint Commissioner of Sales Tax (Registration) and
(ii).in the rest of the State, with the, concerned Joint Commissioner of Sales Tax (VAT ADM) in whose jurisdiction the place of business of the employer is situated.
(5). Amendment to rule 41:
(a) This rule provides for the time for payment of tax as per the return or revised return.
(b) The Department has implemented scheme of filing returns electronically. (c) In view of this, a technical amendment is made to provide for payment to be made as per return or electronic return.
(6). Amendment to rule 45:
(a) Rule 45 provides for method of payment of tax.
(b) As explained in earlier Para challan part of the Form-405 is deleted. A consequential amendment is made and for the words Form-405, the words “challan in Form-210” are substituted.
(c) Now the employer will be required to pay TDS with the use of challan in Form-210.
(7). Amendment to rule 53: Rule 53 provides for reduction in set-off under certain contingencies.
(I). Amendment to sub-rule (2)(b):
(a)Sub-rule 2(b) bcforc amendment provided that if the claimant dealer resales any tax free goods and such goods are packed in any material then set-off on purchases of such packing material was provided after the reduction as mentioned in the said sub-rule.
(b) A new proviso is added by the virtue of this amendment. The proviso provides that no reduction is to be made on such corresponding purchases of packing material if goods so packed, qualifies as sale in the course of export under section (5) of Central Sales Tax Act, 1956.
(II). Amendment to sub-rule (6):
(a) The proviso of the clause (b) of sub-rule (6) is amended with retrospective effect from 8th September 2006.
(b) Earlier, by the amendment dated 23rd October 2008 the rule (6) was amended. Accordingly, it was provided that, if receipts on account of sale are less than fifty per cent. of the total receipts in case of the dealer who is a manufacturer of goods and is not principally engaged in doing job work or labour work, then he is entitled to claim set-off on his purchases of plant and machinery which are treated as capital assets, parts or accessories thereof in respect of period of first three years.
(c) The amendment further provided for the mode of calculation of the period of three years. However, the period of three year was required to be calculated starting from the end of the year containing the date of registration. This resulted in denying the benefits of set-off on the purchases effected in the year of registration. This was not the intention.
(d) Therefore, to overcome this difficulty, the proviso is suitably amended. Now, amended proviso provides for ,the calculation of three years periods from the date of effect of the registration.
E.g. (1) If the registration is granted with effect from the 1st April 2005 then the three years time period will come to an end on the 31st March 2008. However, the dealer will be entitled to claim set-off on his purchases of plant and machinery treated as a capital assets, part or accessories thereof only after 8111 September 2006 i.e. from the date of effect amendment coming into force.
(2) If the registration is granted with effect from the 1st April 2006 then the three years time period will come to an end on the 31st March 2009. However, the dealer will be entitled to claim set-off on his purchases of plant and machinery treated as a capital assets, part or accessories thereof only after 8th September 2006 i.e. from the date of effect amendment coming into force.
(3) If the registration is granted with effect from the 1st April 2007 then the three years time period will come to an end on the 3151 March 2010. As the registration certificate is granted from 1st April 2007 such dealer will be entitled to claim set-off on his purchases of plant and machinery treated as a capital assets, part or accessories thereof any time after 1st April 2007 till the three years time period comes to an end i.e. upto 31st March 2010.
(e) Needless to state that the benefits provided under this proviso shall not be available to the dealers who have obtained registration on or before 8th September 2003. In other words the dealers falling under this proviso will only be entitled to claim set-off on his purchases of plant and machinery treated as a capital assets, part or accessories thereof if the period of three years from the date of registration ends before 8th September 2006.
(f) The amendment is made with a retrospective effect i.e. from 8th September 2006. The period of the three years is to be calculated from the date of effect contained in the registration certificate.
(III). Addition of Explanation:
(a) After clause (b) of sub-rule (6), Explanation is added with effect from 8th September 2006.
(b) This explains the term ‘Receipts” occurring in rule 53(6) for the purpose of determining the turnover of sales as compared to Gross receipts.
(c) The explanation provides that the term ‘receipts’ shall include receipts on account of all activities including business activities within State of Maharashtra but excludes value of goods transferred to own branches or to agents outside the State.
(8). Amendment to Forms appended to the MVAT Rules:
(I). Amendment to Form-231, 232, 233, 234, and 235:–
(a) As explained earlier the Department has implemented the scheme of electronic filing of returns. Now, it is mandatory for every dealer to file return electronically.
(b) In view of this the dealer is required first to make payment of tax, interest, if any, with the use of chalan in Form-210 within the prescribed due dates. Thereafter, he uploads the return. The chalan part of the Return -cum-chalan has become redundant. Therefore, the Chalan part of the Form-231, 232, 233, 234 and 235 is deleted.
(II). Amendment to Form–405:-
(a) The Form-405 is substituted by new Form-405.
(b) A new Form-405 provides separate Box 5(A) for filling the information related to TDS of registered contractors. Whereas the Box 5(B) provides space for filling the said information related to TDS of unregistered contractors.
(c) As explained earlier, the challan part of the Form-405 is deleted. Now the employer will be required to make the payment of TDS in Form-210.
(9). This circular cannot be made use of for legal interpretation of provisions of law as it is clarificatory in nature. if any member of the trade has any doubt, he may refer the matter to this office for further clarification.
(10). You are requested to bring the contents of this circular to the notice of the members of your association.
Commissioner of Sales Tax,
Maharashtra State, Mumbai.
Trade Cir. No.37 T of 2009
I. Copy forwarded To:
(a) All the Addl. Commissioners of Sales Tax in the State.
(b) All the Joint Commissioners of Sales Tax in the State.
(c) The Joint Commissioner of Sales Tax (Mahavikas) with the request to upload this Trade Circular on the Departments web-site.
(d) All the Sr. Dy. Commissioners of Sales Tax in the State.
(e) All the Dy. Commissioners of Sales Tax in the State.
(f) All the Asstt. Commissioners of Sales Tax in the State. (g) All the Sales Tax Officers in the State.
2. Copy forwarded with compliments for information to:
(a) The Officer on Special Duty, Finance Department, Mantralaya, Mumbai.
(b) The Under Secretary, Finance Department, Mantralaya, Mumbai. (c) The Accounts Officer, Sales Tax Revenue Audit, Mumbai and Nagpur.
3. Copy to all the Desks and Desk Officers in the office of the Commissioner of Sales Tax, Maharashtra State, Mumbai.
(G. B. Indurkar)
Joint Commissioner of Sale Tax,
(HQ) 1, Maharashtra State, Mumbai.