Levy of Surcharge in Haryana

CA. RAJAT MOHAN
B.Com(H), A.C.A., D.I.S.A.

–  Basics, Exceptions and Issues

BASICS

“7A. Levy of Additional Tax:-

(1) Notwithstanding anything contained in this Act, there shall be levied and collected on the taxable turnover of a dealer registered under this Act other than a retailer in lump-sum composition with the department, an additional tax, in the nature of surcharge, which shall be calculated at the rate of five per cent of the tax, payable by him:

Provided that the aggregate of tax and the surcharge payable under this Act, shall not exceed in respect of the goods, declared to be of special importance in inter-state trade or commerce under Section 14 of the Central Sales Tax Act, 1956 (Central Act 74 of 1956), the rate fixed under Section 15 of that Act.

(2) Except as otherwise provided in Sub-section (1), the provisions of this Act shall, so far as may be, apply in relation to the additional tax leviable under Sub-section (1), as they apply in relation to the tax leviable under any other provision of this Act.”

Haryana Value Added Tax (Amendment) Act, 2010 levied surcharge @ 5% of tax payable by dealer in Haryana.

EXCEPTIONS

1. No surcharge shall be applicable in case of Retailer in lump-sum composition with the department – Section 9 empowers State Government to prescribe rules for applicability composition scheme whereby, a lump sum linked with production capacity or some other suitable measure of extent of business, or calculated at a flat rate of gross receipts of business or gross turnover of purchase or of sale or similar other measure, with or without any deduction there from shall be paid at such intervals and in such manner, as may be prescribed by State Government
2. Goods, declared to be of special importance in inter-state trade or commerce under Section 14 of the Central Sales Tax Act, 1956 – For these specified goods tax and the surcharge payable under this Act, shall not exceed 4%.

(i) Cereals (Specified)

(ia) coal, including coke in all its forms, but excluding charcoal:

(ii) cotton, that is to say, all kinds of cotton (indigenous or imported) in its un-manufactured state, whether ginned or unginned, baled, pressed or otherwise, but not including cotton waste;

(iia) cotton fabrics covered under heading Nos. 52.05,52.06,52.07,52.08,52.09, 52.10, 52.11, 52.12, 58.01, 58.02, 58.03, 58.04, 58.05, 58.06, 59.01, 59.03, 59.05,59.06 and 60.01 of the Schedule to the Central Excise Tariff Act, 1985 (5 of 1986);

(iib) cotton yarn, but not including cotton yarn waste;

(iic) crude oil, that is to say, crude petroleum oils and crude oils obtained from bituminous minerals (such as shale, calcareous rock, sand), whatever their composition, whether obtained from normal or condensation oil-deposits or by the destructive distillation of bituminous minerals and whether or not subject to all or any of the following processes:—

(1)   decantation;

(2)   de-salting;

(3)   dehydration;

(4)   stabilisation in order to normalise the vapour pressure;

(5)   elimination of very light fractions with a view to returning them to the oil-deposits in order to improve the drainage and maintain the pressure;

(6)   the addition of only those hydrocarbons previously recovered by physical methods during the course of the abovementioned processes;

(7)   any other minor process (including addition of pour point depressants or flow improvers) which does not change the essential character of the substance;]

(iid) Aviation Turbine Fuel sold to an aircraft with a maximum take-off mass of less than forty thousand kilograms operated by scheduled airlines. Explanation: For the purposes of this clause, “scheduled airlines” means the airlines which have been permitted by the Central Government to operate any scheduled air transport service;]

(iii) hides and skins, whether in a raw or dressed state;

(iv) iron and steel (Specified)

(v) jute, that is to say, the fibre extracted from plants belonging to the species Corchorus capsularies and Corchorus olitorius and the fibre known as mesta or bimli extracted from plants of the species Hibiscus cannabinus and Hibiscus sabdariffa-Varaltissima, and the fibre known as Sunn or Sunnhemp extracted from plants of the species Crotalaria juncea whether baled or otherwise;

(va) liquified petroleum gas for domestic use;]

(vi) oilseeds (Specified)

(vi) Linseed (Linum usitatissimum);

(vii) Castor (Ricinus communis);

(viii) Coconut (Le., Copra excluding tender coconuts) (Coconucifera);

(ix) Sunflower (Helianthus annus);

(x) Nigar seed (Guizotia abyssinica);

(xi) Neem, vepa (Azadirachta indica);

(xii) Mahua, illupai, Ippe(Madhuca indica M. Latifolia, Bassia, Latifolia and Madhuca longifolia syn. M Longifolia);

(xiii) Karanja, Pongam, Honga (Pongamia pinnata syn. P. Glabra);

(xiv) Kusum (Schleichera oleosa syn. S. Trijuga);

(xv) Punna, Undi (Calophyllum inophyllum);

(xvi) Kokum (Corcinia indica);

(xvii) Sal (Shorea robbusta);

(xviii)Tung (Aleurites fordii and A. montana);

(xix) Red palm (Elaeis guinensis);

(xx) Safflower (Carthanus tinctorius);

(via) pulses(Specified)

(vii) man-made fabrics covered under heading Nos. 54.08, 54.09, 54.10, 54.11, 54.12, 55.07, 55.08, 55.09, 55.10, 55.11, 55.12, 58.01, 58.02, 58.03, 58.04, 58.05, 11 58.06, 59.01, 59.02, 59.03, 59.05, 59.06 and 60.01 of the Schedule lo the Central Excise Tariff Act, 1985 (5 of 1986);

(viii) sugar covered under sub-heading Nos. 1701.20, 1701.31, 1701.39 and 1702.11 of the Schedule to the Central Excise Tariff Act, 1985 (5 of 1986);

(x) woven fabrics of wool covered under heading Nos. 51.06, 51.07, 58.01, 58.02, 58.03 and 58.05 of the Schedule to the Central Excise Tariff Act, 1985 (5 of 1986).

ISSUES

Section 7A(1) “Notwithstanding anything contained in this Act, there shall be levied and collected on the taxable turnover of a dealer registered under this Act other than a retailer in lump-sum composition with the department, an additional tax, in the nature of surcharge, which shall be calculated at the rate of five per cent of the tax, payable by him.”

Section 45(1) “Notwithstanding anything to the contrary contained in other provisions of this Act, tax on sale or purchase of goods, shall be levied and collected specified in Schedule G on the sale or Purchase price, maximum retail price, face value or the quantity of such goods at the rates and at the stage of sale or purchase and under the circumstances mentioned against such goods in the said Schedule.”

Now it is a matter of great concern that both the provisions begin with similar wording of ‘Notwithstanding anything contained in this Act’ which absolutely are in opposition to each other.

As per rules of interpretation we shall give effect to both provisions if we can however in this case it would not be possible. So we shall assume provision enacted later shall be taken up. There by Dealers dealing in goods mentioned in Schedule G shall levy surcharge of 5%.

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