Rule 36 of Punjab VAT Rules read with section 26 along with section 33 of  Punjab VAT Act, 2005 prescribe for the periodicity of filing of returns and payment of due taxes. Certain persons are required to file their returns and pay taxes on monthly basis and others have to pay it on quarterly basis. However the provisions of section 33 of Punjab VAT Act and Rule 36 makes the law confusing regarding the criteria for determining the periodicity of the payment of taxes by a taxable person.Lets see the relevant provisions relating to the criteria for determining the periodicity of payment of taxes under Punjab VAT Act and Rules.Section 26(1): Every Taxable person shall make self assessment of tax and shall file return for a period, within such time and in such form as may be prescribed.Section 26(2): Every registered person shall make self assessment of tax and shall file return for a period, within such time and in such form as may be prescribed.
The time for filing the return and payment of taxes is prescribed under Rule 36 of Punjab VAT Rules. Relevant provisions of rule 36(1) runs as under:

“36. (1) Every taxable person shall file quarterly self-assessed return in Form VAT-15 within a period of thirty days from the date of expiry of each quarter along with the proof of the payment made into the appropriate Government Treasury and the Tax Deductions at Source (hereinafter referred to as the TDS ) certificates, if any:

Provided that where a person opts to make the payment of tax through crossed cheque or bank draft, he shall enclose the crossed cheque or the bank draft, as the case may be, along with the return, which shall be filed within a period of twenty days from the date of the expiry of the quarter:

Provided further that a person, whose annual tax liability during the previous year exceeds rupees two lakh or more, shall determine his tax liability for every month and shall pay tax by the 20th day of the month, if paid through the crossed cheque or draft and by the 30th day of the month, if paid through the treasury receipt and shall submit the same to the designated officer, along with the information in Form VAT-16; and payment for the last month of each quarter shall be made on the 20th or the 30th day of the close of quarter, as the case may be, along with the quarterly return. The return in Form VAT 15, shall be accompanied by photocopies of the treasury receipt evidencing the payment of tax for the previous two months also.

PROVIDED FURTHER THAT if the annual tax liability of a person exceeds rupees two lakh as stated in the second proviso, the taxable person shall continue to pay tax and furnish information as required in form VAT-16 during all the subsequent year irrespective of the fact that his tax liability decreases from rupees two lakh.

PROVIDED FURTHER THAT a person making sales in the course of inter-State trade or export out of India may, by making an application to the designated officer, opt to file self-assessed return on monthly basis in Form VAT-15 within a period of twenty days, if payment of tax is made by a crossed cheque or draft and within a period of thirty days, if payment is made through a treasury receipt:

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PROVIDED FURTHER THAT a person exclusively conducting business of kacha Arhtia engaged in the purchase and supply of agricultural produce purely on commission basis shall not required to file quarterly self-assessed return in form VAT-15.”

Thus the second Proviso of rule 36 above makes it clear that a taxable person whose annual tax liability during the previous year exceeds rupees two lakh or more, has to determine his tax liability for every month and pay the due taxes accordingly, every month.
However section 33 of the Punjab VAT Act, 2005 which deals with the due date of payment of taxes provides that value added tax due or payable under this Act, shall be paid in case of a taxable person whose gross turnover exceeds rupees one crore in the previous year, on monthly basis by such date as may be prescribed.
Section 33 runs as under:

Due date of payment.

33. Value Added Tax or Turnover Tax due or payable under this Act, shall be paid,-

(a)     in the case of a taxable person whose gross turnover exceeds rupees one crore in the previous year, on monthly basis by  such date, as may be prescribed;
(b)     in the case of a taxable person whose turnover is less than one crore in the previous year, by the date, the return for such a period is required to be filed or as may be prescribed;
(c)     in case of tax due as per  assessment made under this Act, by the date, specified in the notice of demand or within a period of thirty days of the order, which ever is earlier;
(d)     in the case of turnover tax payable by a registered person under  this Act, by the date, the return for the period is required to be filed;
(e)     in the case of a casual trader, by such date as may be prescribed; and
(f)      in any other case, the tax shall be payable by such date, as may be specified by the designated officer. 
Thus there is an anomaly between the Rule 36 and section 33 so far as the periodicity of payment of tax is concerned.

 Whereas rule 36 provides that a taxable person whose annual tax liability exceeds rupees two lakh or more in the previous year, is required to file returns and pay taxes on monthly basis, on the other hand section 33(a) of Punjab VAT Act provides that a taxable person whose gross turnover exceeds rupees one crore in the previous year, shall pay tax on monthly basis.

Two different criteria s are prescribed under section 33 and rule 36 for making a taxable person liable to pay taxes monthly instead of quarterly.

Rules are always subordinate to the provisions of the Act,whenever there is clash between the two, provisions of the Act has to be upheld. Anyhow such anomalies in the law always create confusion and may become cause of litigation, therefore such anomalies needs attention of the legislature and should be removed.

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(Author – Amit Bajaj Advocate, Bajaj & Bajaj Advocates, 128, Sangam complex, Milap chowk, Jalandhar City (Punjab), Email: amit@amitbajajadvocate.com, M +919815243335)

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