Punjab Govt withdraws Entry tax & Imposes Advance tax

Punjab Government has withdrawn the Entry tax under the Punjab Tax on Entry of Goods into Local areas Act, 2000, which was under judicial scrutiny and was cause of continuous litigation between the Government and the VAT dealers across the State.

The Government has exempted all the taxable persons registered under Punjab VAT Act, 2005 from payment of entry tax on all the goods covered under notification dated 18.09.2012 issued under section 3A of the Entry Tax Act, as a result of which no entry tax is payable on any of the items covered under Notification dated 18.09.2012 by the taxable persons.

It is pertinent to mention here that notification dated 18.09.2012 was issued in suppression of all the earlier notifications issued under Entry Tax Act and covered all the goods on which Entry Tax is leviable at present.

Thus Entry tax is no more applicable on any of the items. However no exemption from the notification dated 04.04.2013 issued u/s 3A of the Entry Tax Act, imposing entry tax on Automobiles purchased from outside the State of Punjab, has been seemingly given as yet.

The effect of this withdrawal of entry tax would mean that all the deferments claimed by the persons on the basis of the stay order of the Punjab & Haryana High Court in Bhushan Power and Steel Limited vs State of Punjab CWP 15378 of 2008 would come to an end. Since there is no entry tax there would be no deferment from the same.

 However this exemption from entry tax however is not a relief to taxable persons, because at the same time Advance VAT has been levied u/s 6(7) of the Punjab VAT Act, 2005 on all the items on which entry tax was leviable.

Another thing to be noted is that entry tax has not been completely withdrawn. As per the wording of the notification provided below, it is only the taxable persons who have been exempted from the payment of entry tax.

Suppose if a person is not registered under Punjab VAT Act, 2005 as taxable person, but he imports the goods on which entry tax is leviable, for consumption or use, then he will have to pay entry tax on such goods, provided that he falls in the definition of “Dealer” under the Punjab Tax on Entry of Goods into Local Areas Act, 2000.

Also Read :-Punjab VAT – Goods Under Advance VAT

The notification withdrawing entry tax can be seen herebelow:

GOVERNMENT OF PUNJAB

DEPARTMENT OF EXCISE AND TAXATION

(EXCISE AND TAXATION-II BRANCH)

NOTIFICATION

The 4th October, 2013

No. . – In pursuance of the provisions of the proviso to section 3-A of the Punjab Tax on Entry of Goods into Local Areas Act, 2000 (Punjab Act No.9 of 2000), and all other powers enabling him in this behalf, the Governor of Punjab is pleased to exempt the taxable persons registered under the Punjab Value Added Tax Act, 2005, from the payment of the tax levied by the Government of Punjab, Department of Excise and Taxation, Notification No. S.O. 83/P.A.9/2000/S.3-A/2012, dated the 18th September, 2012, with immediate effect.

D.P.REDDY,

Financial Commissioner Taxation and

Secretary to Government of Punjab,

Department of Excise and Taxation.