Recently the Punjab Govt. in order to meet their Deficit Finance has enhanced the rate of Tax on taxable goods sold within the state of Punjab and sold to unregistered dealer under the Central Sale Tax in Inter State but this is strange that rates in schedule are increased without following the provisions of the Act as Section 8 (3) casts liability on State Govt. to issue 15 days notice by notification of their intention, if they want to alter the rate of Tax specified in any of Schedules Section 8(3) is reproduced as under:-

The State Government after giving fifteen days notice by notification, of its intention so to do, may by like notification, alter the rate of tax specified in any of the Schedules, add to or omit from or otherwise amend the Schedules an thereupon, the Schedule shall be deemed to have been amended accordingly.

Provided That if, State Government is satisfied that circumstances exist, which render it necessary to take immediate action, it may, for reasons to be recorded in writing, dispense with the condition of previous notice.

However the mechanism adopted by the Punjab Govt. is wrong but to avoid unnecessary litigation, we are bound to follow the Public Notice, the copy of public notice and its effects are discussed below : –

Punjab Govt. through Public Notice dated 02-09-2012 has increased the rate of tax w.e.f 03-09-2012. 

The copy of Public Notice is as follows :-

Effects of this Public Notice are as under: –

1. Sugar: – The state Government is pleased to waive tax on Sugar w.e.f 03-09-2012.

2. Increase in the rate of tax by 0.5% under the Punjab VAT Act 2005 w.e.f 03-09-2012. Which resulted in increase, the details of same are as follows: –

A. The rate of Tax on Schedule B Goods has been increased from 5% to 5.5%    plus Additional Tax @ 10% and net effect from 03-09-2012 shall be 6.05% (5.5% + Additional Tax = 6.05%)

B. The rate of Tax on declared goods as mentioned in Schedule C-1 has been increased from 4% to 4.5% plus Additional Tax @ 10% and net effect from 03-09-2012 will be 4.95%. It is pertinent to clarify that  on wheat, paddy and rice, there is no change in the rate of Tax w.e.f 03-09-2012 and the previous rate of Tax i.e. 5% will prevail, reason being maximum ceiling rate on declared goods is 5%.

C. The rate of Tax on items mentioned in Schedule D has been increased from 20% to 20.5% + Additional Tax @ 10%.

D. The rate of Tax on items mentioned in Schedule E i.e.

Diesel other than premium Diesel: – 8.75% + Additional Tax @ 10 %

Petrol: – 28%   + Additional Tax @ 10 %

Plastic Granules, Plastic Powder, master batches: – 8.5% + Additional Tax @ 10 %

Spectacles, goggles, sunglasses, parts and lens cleaners: – 8.5% + Additional Tax 10%

UPS: – 8.5% + Additional Tax @ 10%

Inverter: – 8.5% + Additional Tax @ 10%

Cell phones including all parts and accessories such as Head Phone, Data Cable, Mobile Charger, Memory Card, Ear Phone, Audio Device, Mobile Battery, Bluetooth and Mobile Holder :- 8.5% + Additional Tax @ 10%.

 E. The rate of Tax on the Residuary entry i.e. schedule F of Act, (goods not mentioned in any other schedule), has been enhanced from 12.5% to 13% + Additional Tax @ 10% net effect from 03-09-2012 shall be 14.30% (13% + Additional Tax  @ 10%).

F. The rate of Tax on Pre-owned cars having engine capacity not exceeding 1000 cc is Rs 3000 per car on the first sale by the dealer.

And for the capacity exceeding 1000 cc is Rs 5000 per car on the first sale by the dealer.

G. The purchase Tax on Sugarcane shall be 3% + Additional Tax @ 10%.

H. The rate of Tax on Liquefied Petroleum Gas for domestic use shall be 4% + Additional Tax @ 10%.


Advocate J S Bedi

5/13, Central Town,

Behind Ajit Samachar.

Jalandhar-144001. Punjab

M- 98140-66336,

Email: [email protected]

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One Comment

  1. renuka kaushal says:

    please advise me regarding the applicable vat rate on fibres and fibre accessories used in vehicles (cars) including surcharge.

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June 2021