8th floor, Vikrikar Bhavan, Mazgaon, Mumbai-400010.
No. VAT /AMD-1012/IA/ADM-8 , Mumbai – Date -06.08.2012
Trade Circular No. 13T of 2012
Sub Amendment to the certain Laws administered by the Sales Tax Department.
Ref. (1) Maharashtra Act No. VIII of 2012 dated 25th April 2012.
To give effect to the Budget proposals, a Bill (Legislative Assembly Bill No. XVII of 2012) to amend the Maharashtra Sugarcane Purchase Tax Act, 1962, the Maharashtra State Tax on Professions, Trades, Callings and Employment Act, 1975, the Maharashtra Tax on Entry of Motor Vehicles into local Areas Act, 1987, the Maharashtra Tax on Luxury Act, 1987, the Maharashtra Tax on Entry of Goods into local Areas Act, 2002 and the Maharashtra Value Added Tax Act, 2002 was introduced in the Legislature. The said Bill has been passed by both the houses of the Legislature. The Act is now published in the Maharashtra Government Gazette dated 25th April 2012. (Mah. Act No. VIII of 2012).
2. Amendments effected by the Maharashtra Act No. VIII of 2012. •
The salient features of the amendments are briefly explained below:
(A) Amendments to the Maharashtra Sugarcane Purchase Tax Act, 1962.-
Amendment of section 12B‑
(1) The section 12B empowers the State Government to provide for exemption from sugarcane purchase tax under circumstances specified in this section.
(2) A new clause (d) is added. This empowers the State Government to exempt either fully or partly the payment of the sugarcane purchase tax in respect of the factories which have established co-generation unit for the generation of electricity from the byproducts of the factory.
(B) Amendments to Maharashtra State Tax on Professions, Trades, Callings and Employment Act, 1975:-
1. Amendment of section 3.‑
(1) Section 3 provides for the levy of the Tax. Sub-section (2) is amended and after second proviso a third proviso is added.
(2) According to the existing provisions of sub-section (2), every person who is engaged in any professions, trades, callings or employment and who falls under the given class or classes mentioned in the Schedule is required to pay tax.
(3) Further, sub-section (2) of section 5 provides that every person liable to pay tax shall obtain a certificate of enrollment.
(4) However, it is experienced that there are large number of un-enrolled persons who do not get enrolled because of their liability for all the earlier periods. It is now provided that the liability to pay tax for the un-enrolled period shall be restricted to eight years.
(5) The period of eight years shall be computed from the end year immediately preceding the year in which he has obtained enrollment certificate. Or in the cases where proceedings are initiated by the department against such person for enrollment, then eight years shall be computed from the end of the year preceding the year in which such proceedings were initiated.
Eg. (a) If a person is self employed with effect from 1st April 2000 however he makes an application for enrollment on 1st June 2012 then in this case the said person will be required to pay taxes with effect from lat April 2004.
(b) The said person will get the benefit of this amendment and will be eligible for exemption in respect of taxes prior to let April 2004.
2. Amendment to section 6.‑
The section 6 provides for filing of the returns by every registered employer. The amendments to this section are explained below:-
(1) Amendment of sub-section (3):‑
(a) Sub-section (3) provides the penalty of Rs.300/- per return for failure to file a return within prescribed time.
(b) This sub-section (3) is amended. The amendment provides for late fee of Rs. 1000/- for failure to file a return within the prescribed time.
(c) Accordingly, an employer shall make the payment of late fee of Rs. 1000/- for each default and the said amount shall be paid on or before filing of the return for the default period.
(d) The State Government has appointed the 1st August 2012 to be the date on which this sub-section would be operative. Therefore, the provisions of this sub-section shall be applicable with effect from 1St August 2012.
(e) The employer shall be liable to pay late fee in respect of all the late returns that are filed on or after the 15t August 2012.
(f) In other words late returns that are filed on or before 31st July 2012, the old provision of sub-section (3) will remain in force.
(2) Addition of new sub-section (4):- Earlier there was no provision to file the revised returns under the Profession Tax Act. A new sub-section is added which enables filing of the revised return. The revised return may be filed under following circumstances:
(a) If an employer discovers any omission or incorrect statement in the return filed by him, then he may file a revised return within six months of the end of the year containing the period of return/ or before the notice for assessment is served on him in respect of the period covered by the said return, whichever is earlier.
(b) If on receipt of intimation as a result of audit or inspection (i.e. search and seizure u/s 18) by the Profession Tax Authority, the dealer agrees with the finding contained in such intimation, he may file a revised return within thirty days from the date of receipt of intimation.
3. Amendment of section 19.‑
(1) The section 19 provides for the refund of the excess payment, if any.
(2) A technical amendment is carried out so as to include employer.
(C) Amendments to the Maharashtra Tax on Entry of the Motor Vehicles into Local Areas Act, 1987.
1. Amendment of Section 2 clause (b), section 9A and section 13:‑
Appointment of appellate authority is provided under section 5 A reference to section 6 instead of section 5 is being made in the above sections. In order to correct this obvious mistake an amendment is made and the said reference is now substituted by section 5.
2. Amendment to clause (I) and (g) of section 2 and to Section 3:- A technical amendment is carried out to above provisions. Now in addition to “the use or sale”, the word “consumption” is added.
3. Addition of new section 7A.‑
(1) New section 7A is inserted. This provides for electronic filing of returns and payment of tax, interest penalty or any other amount payable electronically.
(2)This section further empowers the Commissioner to notify the class or classes of importers who shall file return and make payment under the Act electronically. The section also provides for submission of appeal, application, annexure and such other document as may be desired by Commissioner in an electronic form
(3) In addition to this, the Commissioner may by notification amend any form or introduce new form of returns, applications, annexures, etc. that are required to be filed in electronic form
(D) Amendments to the Maharashtra Tax on the Entry of Goods into Local Areas Act, 2002.
1. Amendment to the SCHEDULE appended to the Act.
(1) The amendments to the various entries in the SCHEDULE are carried out. The SCHEDULE under the Entry Tax on Goods is amended and is now aligned with the corresponding SCHEDULE entries under the Maharashtra Value Added Tax Act, 2002.
(2) Now, the rate of tax under Entry Tax Act shall be as per the rate of tax provided on the similar goods under the MVAT Act as amended from time to time.
2. Addition of New Entry-16: A new entry 16 for Natural Gas is added. The rate of tax in respect of Natural Gas with effect from 1st May 2012 will be 12.5%. This will include natural gas in all forms such as CNG, PNG, LNG.
(E) Amendments to the Maharashtra Value Added Tax Act, 2002:‑
1. Amendment to Section 2:‑
Addition of New clause (15A) and (17A):-
(1) The clauses (15A) and (17A) are inserted with retrospective effect i.e. with effect from 1st April 2005.
(2) The Act at many places refers to the term. “Motor Spirit” and “Petroleum Products”. In order to provide clarity, these terms are now defined.
(3) Accordingly, it has been provided that “Motor Spirit” shall include High Speed Diesel Oil, Aviation Turbine Fuel (Duty paid and Bonded), Aviation Gasoline (Duty paid and Bonded) and Petrol.
(4) Whereas the Petroleum Products shall include Superior Kerosene Oil (SKO), Liquefied Petroleum Gas (LPG), Furnace Oil (FO), Light Diesel Oil (LDO), Raw Naptha or Naptha, Low Sulphur Heavy Stock.
(5) In addition to this, the State Government has also taken powers to notify any product as Motor Spirit or Petroleum Product.
2. Introduction of Purchase Tax.
(1) Purchase tax has been introduced for the first time in the MVAT Act. The State legislature provided purchase tax only in respect of two commodities, namely cotton and oil seeds. Accordingly sections 6A and 6B are inserted.
(2) Section 6B which is in respect of Oil seeds has been notified to be effective from 1st May, 2012.
(3) Whereas section 6A in respect of levy of purchase tax on cotton is yet to be notified. Since section 6A is not notified, all the amendments made to various provisions in respect of purchase tax, will have to be read in respect of oil seeds only.
(4) As a consequence of introduction of purchase tax the amendments to relevant sections are carried out. These amendments are explained below:-
(a) Amendment of clause (29) of section 2:‑
(i) Clause (29) defines the term “tax”. At present “tax” means the Sales Tax leviable or payable.
(ii) As a result of this amendment, the term “tax” shall mean the Sales Tax or Purchase Tax leviable or payable.
(b) Amendment of section 3:‑
(1) Amendment of sub-section (2):‑
(a) This sub-section provides that a dealer is not liable to pay sales tax till his turnover of sales in a year, does not exceed prescribed limit.
(b) On the similar lines, this sub-section is amended to provide for exemption from purchase tax on turnover of purchases of Oil seeds, in a year, till such turnover exceeds prescribed limit.
(ii) Amendment to sub-section (3):‑
(a) This sub-section deals with the continuance of the liability to pay tax till the cancellation of registration certificate.
(b) Amendment is made to include the turnover of purchases liable for purchase tax.
(iii) Amendment to sub-section (4):‑
(a) This sub-section prescribes the limit of turnover of sales. Every dealer whose turn-over of sales exceeds the prescribed limit will become liable to pay tax.
(b) In view of the amendment, the dealer whose turnover either of the sales or purchases exceeds the prescribed limit in respect of purchases of oil seeds from a person or dealer who is un-registered will become liable to pay purchase tax, if the oil seeds are transferred to branches or to own place of business or agent outside the State or if the oil seeds are used in manufacturing of tax-free goods or in the manufacturing of taxable goods, which are sent outside the state other than by way of sale,
(iv) Addition of New sub-section (5A):‑
(a) A new sub-section (5A) is inserted. For calculating the limit of turnover of sales for liability to tax certain contingencies are given in sub-section (5) under which the turnover of sales is to be considered.
(b) The contingencies given in sub-section (5) shall be applicable for calculating the limit of turnover of purchases of oil seeds.
(c) Insertion of New Sections for levy of Purchase Tax.- In order to levy purchase tax in respect of Cotton and Oil seeds subject to the conditions of the charging section 6A and 6B, consequential amendments to provisions of other sections have been made. These sections alongwith the charging sections are discussed as follows:
(1) Insertion of New Section 6A.‑
(a) Section 6A deals with the levy of purchase tax on the URD purchase of Cotton. This purchase tax is to be levied under the circumstances given in this section.
(b) However, section 2(a) of the Amendment Act provides that provisions of section 6A shall come into force from such date as the State Government, may appoint in this behalf. As of today, the State Government has not appointed any date for the purpose of this section. Hence, this section has not come into force. Till such time the purchase tax as provided under this section will not be levied in respect of the purchases of cotton.
(ii) Insertion of New Section 6B.‑
(a) Section 6B deals with the levy of purchase tax on URD purchases of Oil seeds subject to the given circumstances.
(b) As provided in section 2(a) of the Act No. VIII of 2012, the provisions to levy Purchase Tax on oil seeds have come into effect from 1st May 2012.
(c) This section provides for the levy of purchase tax on the purchases of oil seeds from an un-registered dealer or person, under following circumstances:-
(I) if the purchases of Oil Seeds from un-registered dealer or person are dispatched outside the State other than by way of sale to his branch or agent.
(H) if the purchases of oil seeds from un-registered dealer or person are used in the manufacturing of,‑
(A) taxable goods and the said goods are dispatched outside the State to his branch or agent, or
(B) tax-free goods.
(d) Purchase tax under this section will become payable in the month in which the contingencies referred in point (c) and (d) above occur. In other words, purchase tax will not be payable merely because the oil seeds are purchased from un-registered dealer, but it will become payable only on the fulfillment of the contingencies as explained above.
(e) Provision for the set-off in respect of the purchase tax is made in the rules.
(v) Amendment of Section 45:
(a) Section 45 deals with the liability of the agent to pay tax on behalf of the principal.
(b) This section is amended so as to cast liability in certain contingencies on certain agents to pay sales tax or, as the case may be, purchase tax on behalf of the principal.
(vi) Amendment of section 94:‑
(a) This section deals with the deemed payment for holder of the Entitlement Certificate under the deferral scheme.
(b) In view of the provision for levy of purchase tax, a consequential amendment is carried out.
3. Amendment of Section 8(3):‑
(1) Sub-section (3) is amended to include co-developer. Further, the Explanation to clause (e) is amended and the terms Developer and Co-developer in respect of Special Economic Zone are defined.
(2) Such Developer or Co-developer will be required to be certified by the Commissioner of Sales Tax.
(3) The notification in this respect has not been yet issued.
4. Amendment to Section 8(3C):- Textile Processors:
(1) The section 8(3C) provides for the exemption of tax to the textile processors in respect of the material transferred in the execution of works contract. This exemption is available to the textiles/fabrics as covered by the 1st Schedule to Additional Duties of Excise (Goods of Special Importance) Act, 1957.
(2) The Schedule to ADE Act was amended by Finance Act of 2011 and is made effective from 8th April 2011. As a result of which textile processors in respect of transfer of material in the execution of works contract became liable to tax.
(3) Accordingly, amendment provides that the reference to ADE Act, 1957 shall mean the ADE Act as it stood before the Finance Act of 2011. (i.e. before omission of First Schedule of ADE Act,).
(4) The effect of the amendment is that with effect from 1st May 2012 the textile processors will be exempted from tax in respect of the material transferred in processing of textiles that are described in column (3) of the First Schedule of ADE Act as it stood immediately before the 8th April 2011.
(5) Needless to say, for the intervening period starting from 8th April 2011 to 30th April 2012 the activity of textile processors in respect of transfer of material in the execution of works contract will attract tax.
5. Amendment of Section 20:‑
(1) A new sub-section (6) is added. At present, the section 29(8) provides for levy of penalty of Rs.5000/- for failure to file a return within the prescribed time.
(2) The amendment provides that any dealer or person who fails to file return within the prescribed time will now be liable to pay a late fee of Rs. 5000/-.
(3) The State Government has appointed the 1st August 2012 to be the date on which this sub-section would be operative. Therefore, the provisions of this sub-section shall be applicable with effect from 1st August 2012.
(4) The dealer shall be liable to pay late fee in respect of all the late returns that are filed on or after the 1st August 2012.
(5) In other words late returns that are filed on or before 31•t July 2012, the old provisions of section 29(8) will remain in force.
6. Amendment of Section 26:‑
(1) This section is in respect of appeals before the appellate authority or Tribunal. In order to facilitate speedy disposal of appeals, certain measures are proposed.
(2) Sub-section (6) provides for admission of appeal and stay to order appealed against on part payment of disputed amount. A proviso has been added to sub-section (6). It is applicable to all appeals filed either before departmental appellate authorities or the Tribunal.
(3) The amended provisions shall be applicable in respect of all the appeals that filed on or after this amendment or are pending as on 1st May 2012.
(4) It is now provided that, where an appellant seeks adjournment on three occasions or fails to attend the appeal proceedings on three occasions whether consecutive or not, the stay, if any, granted against the disputed amount shall stand vacated (when the appellant seeks third adjournment or if fails to attend for third time) unless the appellant pays 15 percent of the disputed amount or Rupees 15 crore, whichever is less, as part payment, within the time stipulated by the appellate authority or Tribunal.
(5) The three occasions for non attendance or adjournment, in case of pending appeals, shall be counted with effect from 1st May 2012. The appellant will get the benefit of three adjournments at the first appellate stage as also at Tribunal Stage.
(6) In other words, if the appellant takes any adjournment or fails to attend on or after 1st May 2012, the said adjournment(s) or failure to attend shall be taken into consideration so as to count three occasions.
(7) An explanation is added to the proviso to clarify that the above ceiling of 15 per cent. or 15 Crore shall also include the part payment already made against disputed dues. Thus if 10% part payment was made at the time of admission of appeal, then additional 5% of disputed dues will be payable under this proviso for continuation of stay.
(8) If the appellant fails to pay the amount within the time stipulated by the appellate authority or tribunal, the stay to recovery shall stand vacated. If the amount is paid within the time given by the appellate authority, the stay shall continue. The appellate authority or Tribunal shall accordingly pass such orders modifying or vacating the earlier stay.
(9) This order for additional part payment is made non-appealable.
(10) Needless to say that where part payment at the time of admission is already made at 15% of the disputed amount or Rs.15 Crore, whichever is less, then this proviso will not come into picture.
7. Addition of new section 26A:-
(1) A new section 26A is added to empower the Commissioner to decide and regulate the filing of the appeal before the Hon’ble High Court. This section is similar to section 268-A under the Income Tax Act. Presently, in each case, where the decision of the Tribunal is not accepted by the department, appeal is required to be filed to the Hon’able High Court. This results in large number of appeals being filed, even on the same issue and even for insignificant revenue involved.
(2) For this purpose, the Commissioner is empowered to issue orders, instructions or directions and fix the monetary limit in respect of which an appeal to the Hon’ble High Court may or may not be filed.
(3) Further, if the Commissioner decides not to file appeal or to file appeal in respect of a particular issue or a dealer, then this decision will not preclude the Commissioner from filing the appeal in respect of the same issue or the same dealer for any other period
(4) In the event the Commissioner has not filed any appeal as stated above and the issue is already in appeal in some other case, the appellant in that particular case in which appeal is not filed, will not be liable to contend that the Commissioner has given assent in the issue and hence, the department is barred from contesting the issue involved.
(5) The instructions, directions and orders to be issued under this section and modalities of operation of this section will be issued in due course.
8. Amendment to section 29:‑
(1) Addition of new sub-section (2A):
(a) Penalty for failure to apply for registration etc (for Unregistered dealer). A new sub-section (2A) is added. The amendment provides that a dealer, who fails to apply for registration or carries business without obtaining registration and in contravention of the provisions of the Act, shall be liable to pay a penalty of a sum equal to the amount of tax payable by the said dealer for the period during which he has remained un-registered.
(b) For this purpose, the Commissioner shall provide an opportunity of being heard.
(2) Deletion of sub-section (8):
(a) Sub-section (8) provided for the levy of penalty for failure to file a return within the prescribed time. As discussed above, section 20 is amended and a late fee of Rs. 5000/ – is provided for failure to file a return within the prescribed time.
(b) This sub-section is deleted with effect from 1st August 2012.
(c) In respect of the belated returns filed on or before 31st July 2012 the provision of sub-section (8) of section 29 shall be applicable.
9. Addition of new section 31A:
(1) A new section is added to empower the State Government to issue a notification,-
(a) so as to require any person, local body, authority or agency to collect an amount towards tax.
(b) so as to notify the rate at which such collection shall be made [see sub-section (2)].
(2) This section is divided into two parts.‑
(a) Clause (a) provides that if any person, local body, authority or agency auctions the right for excavation of sand under their jurisdiction, then he shall collect, from the successful auction purchaser, an amount towards tax at the rate notified by the State Government.
(b) Clause (b) provides that any person, local body, authority or agency who has temporary possession or control over the goods that would be notified, then, pending the clearance of the said goods by the purchaser or consignee, he shall collect from the said purchaser or consignee an amount at the rate notified by the State Government.
(3) The amount so collected shall be in addition to the amount fixed towards auction of sand or, as the case may be, for clause (b) towards any charges recoverable by the said authority. The amount so collected shall be paid into Government Treasury in the manner prescribed under rule 41 and rule 45.
(4) The authority shall issue a certificate in Form 421 to the effect of tax collected at source to the auction purchaser or dealer from whom it is so collected.
(5) If the aforesaid person or authority deposits the amount so collected into Government Treasury, then such purchaser shall be deemed to have been discharged the tax liability to the extent of the said amount and may adjust the amount towards his tax liability in the return for that period.
(6) The notification in this respect has not been yet issued.
10. Amendment of Section 41:
(1) Sub-section (4) of section 41 is amended. A new clause (c) is added.
(2) By addition of this clause, the State Government is empowered to issue notification and exempt payment of the tax payable either fully or partly on the sales of furnishing cloth as covered under entry 101 of SCHEDULE C.
(3) The exemption proposed to be provided shall be in respect of all sales except the sales made at last point.
(4) The notification under this sub-section has yet not been issued.
11. Amendment of section 59:‑
(1) Section 59 empowers the Commissioner to transfer any proceeding from one authority to another.
(2) This sub-section is amended to include Raigad district in addition to Brihan Mumbai and Thane. The Commissioner, now will not be required to give a hearing for transfer of proceedings from Brihan Mumbai or Thane to Raigad or vice-versa.
12. Amendment of section 86:‑
(1) Section 86 provides for tax invoice and memorandum of sales or purchases. Sub-section (1) and (3) provides a time period for preservation of invoice, bill, cash memorandum etc. upto three years. This period is increased to “eight years”
(2) This amendment is carried out with effect from 1st April 2005.
13. Amendments so as to give effect to the Re-organization of the Sales Tax Department.
(1) The Government of Maharashtra, Finance Department had issued a Resolution dated 18th November 2011 and proposed re-organization of the Sales Tax Department.
(2) This re-organization necessitated certain changes in the various Acts administered by the Sales Tax Department. The Additional Commissioner (Establishment), Maharashtra State under these Acts is designated as Special Commissioner, Maharashtra State.
(3) Further, in order to give effect to the re-organization, relevant amendments are carried out to the definition of the term Commissioner so as to include a Special Commissioner.
(4) Similar amendments are carried out in the other Acts administered by the Department except the Sugarcane Purchase Tax Act and the Chit Fund Act.
3. 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.
4.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.