Circular No.10T of 2011.
Sub :- Administrative relief in respect of import export licences covered under Schedule Entry C-39 of MVAT Act, 2002.
Ref:- government Resolution No. VAT 1511/CR-111/Taxation-1, dated 21st October 2011.
The State Government has issued a Government Resolution referred above providing administrative relief for the period 1st April 2005 to 31st December 2010 to the dealers who have collected and paid tax in respect of duty paid scrips which were tax-free prior to 1st January 2011 under the Maharashtra Value Added Tax Act, 2002.
Entry 39 of Schedule C to MVAT Act provides a notified list of intangible goods for the purpose of levying tax. The notified list of intangible goods included certain import licenses
issued under Foreign Trade (Development and Regulation) Act, 1952. However, all the scrips issued under Foreign Trade (Development find Regulation) Act, 1992, were not covered by the said notified list. Those scrips which were not notified under entry C-39, were covered by entry 27 of Schedule A and were tax-free.
However, under the belief that all the scrips are covered by the term import licenses and are covered under entry C-39, tax has been collected on the sale of scrips and paid into the Government Treasury.
In order to include all the duty paid scrips issued under Foreign Trade Policy under a single entry a notification No.VAT 1510/CR 109/ Taxation-1, dated 20th December 2010 was issued amending sub-entry 3 of entry C-39 of MVAT Act. The amended entry provides for a generic entry including all kinds of Duty credit Scrips covered under Foreign Trade (Development and. Regulation) Act, 1992. This notification is effective from 1st January 2011.
For the period 1.4.2005 to 31.12.2010, the various export organizations represented to the Government that the above notification may be made effective retrospectively and instructions may be issued to allow set off on the basis of tax invoice as proof of tax paid into the Government Treasury.
03. Considering the above request of these organizations, the Government has issued the Government Resolution dated 21st October 2011 referred above.
The Salient Features of the Government Resolution are as follows:-
(a) The tax which has been wrongly collected and paid to the Government Treasury on the sale of any scrips which are issued under Foreign Trade (Development and Regulation) Act, 1992, but not covered by sub-entry 3 of entry C-39 of MVAT Act, @4% for the period from 1st April 2005 to 31st March 2010 and @5% for the period 1st April 2010 to 31st December 2010 shall not be forfeited
(b) No refund of the amount of tax paid on sale of scrips would be allowed.
(c) Set off would be allowed to the purchaser subject to the condition that the seller has paid tax on the sale of such scrips to the Government Treasury.
Conditions for availing the administrative relief
(1) The dealer purchasing or selling the scrips should be a registered dealer under MVAT Act, 2002.
(2) The dealer should have paid tax on the tax-free scrips @4% for the period .1.4.2005 to 31.3.2010 and @5% for the period 1.4.2010 to 31.12.2010.
Authorities granting administrative Relief
(a) In pursuance of the powers conferred by the above resolution the powers conferred on the Commissioner of Sales Tax are hereby delegated further to all the sub-ordinate assessing authorities.
(b) All other conditions regarding availment of set-off by the purchasing dealer shall be applicable.
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.
Commissioner of Sales Tax,
Maharashtra State, Mumbai.