Understanding VAT 47 and VAT 49 under RVAT Act, 2006

Manshi Baid

REQUIREMENT OF VAT 47

Provisions related to the documents including the road permits to be carried with the goods in movement from outside the state or to outside the state are provided under Sec 76 to Sec 79 of RVAT Act 2003. Going through these sections read with Rule 52 to 57 of Rajasthan Value Added Tax Rules 2006 will clear in our mind the complete scenario of the formalities to be done while sending goods outside the state or importing goods from outside the state. Let us discuss these sections one by one.

Section 76 (Establishment of Check Post or Barrier and inspection of goods while in movement)

 This section contains 13 sub sections which are discussed below separately.

Sub-Section (1)

 This sub-section empowers the Commissioner to set up a Check post or erect a barrier or both at such places as he consider necessary to prevent or check evasion of taxes , by notification in the official Gazette and appoint a person as an in charge to inspect the documents produced and goods in movement at such check post or barrier.

Sub-Section (2)

 This sub-section provides that the owner or the person authorized by the owner or driver or the in charge of the goods or vehicle or the goods in movement shall carry with him all the relevant documents i.e. challans and bilties , invoices and bills of sale of dispatch documents , along with the declaration form with the goods in movement. He should stop the vehicle or carrier at every check post or barrier and while entering into or leaving the state at the nearest check post or barrier .He should produce all the documents to the person in charge of the check post or barrier and should allow the person in charge of the check post or barrier or any other person authorized by such in charge to inspect the goods in vehicle or carrier. Let us discuss all the clause of this sub section separately as penalty imposed under the below mentioned sub sections have separate description.

(a) The owner or the person duly authorized by such owner or the driver or the person in charge of a vehicle or carrier or of goods in movement shall stop the vehicle or carrier at every check post and while entering and leaving the limits of the state bring and stop the vehicle at the nearest check post or barrier

(b) The owner or the person duly authorized by such owner or the driver or the person in charge of a vehicle or carrier or of goods in movement shall carry with him goods vehicle record including challans and bilties invoices prescribed declaration forms and bills of sale or dispatch memos

(c) The owner or the person duly authorized by such owner or the driver or the person in charge of a vehicle or carrier or of goods in movement shall produce all the documents including prescribed declaration forms relating to the goods before the in charge of the check post or the barrier

(d) The owner or the person duly authorized by such owner or the driver or the person in charge of a vehicle or carrier or of goods in movement shall furnish all information in his possession relating to the goods and

(e) The owner or the person duly authorized by such owner or the driver or the person in charge of a vehicle or carrier or of goods in movement allow the inspection of the goods by the in charge of the check post or barrier or any other person authorized by such in charge.

Sub-Section (3)

Sub-Section (4)

 This sub-section provides that if the goods are in movement within the territory of Rajasthan State then the Assessing Authority or the officer authorized under Sub-section (1) by the Commissioner can stop the vehicle or carrier or the person carrying such goods for inspection at any place within his jurisdiction and after that all the provisions of sub-section (2) will apply.

Sub-Section (5)

 This sub-section doesn’t apply to exempted goods as this sub-section clearly stated that where any goods in movement, other than exempted goods, are without documents or are not supported by documents are required under sub-section (2) or documents provided appears to be false or forged then the person in charge of the check post or barrier or the officer authorized under sub-section (4) may:-

(a) Direct not to part with the goods in any manner including re-transporting or re-billing until an enquiry is made or verification is done. This inquiry or verification should be completed within 7 days.

Note : Sub Rule 4 of Rule 56 provides that in this case goods are seized , the assessing authority or the officer authorized u/s76(4) shall issue a show cause notice on the owner or the person authorized by the owner or the driver or person in charge of the vehicle or carrier or the goods in movement requiring him why the documents were not produced or false documents were produced in respect of goods in movement. The response from the owner or the person authorized by the owner or the driver or person in charge of the vehicle or carrier or the goods in movement shall be received within 7 days from the date of service of notice. In case the response is not received within one month from the date of service of notice then the assessing officer or the person authorized u/s 76(4) with the prior approval of the jurisdictional Deputy Commissioner can sell the goods in open auction. The amount of penalty along with interest or other charges shall be recovered from the sum realized from sale of such goods. Excess money if any shall be paid to the person entitled to the sale proceeds if the application is made by such person to the Jurisdictional Deputy Commissioner.

(b) Seize the foods after recording the reasons in writing and give a receipt in Form Vat 52

(c) Release the goods seized under clause (b) if adequate security is furnished by the owner or the person authorized by the owner or driver or the in charge of the vehicle or carrier or the goods in movement. The amount of security should be equal to the estimated value of goods.

 Sub Rule 6 of Rule 56

Sub-Section (6)

This sub-section deals with the penalty to be imposed in case the person in charge of the check post or the barrier or the officer authorized under sub-section (4) after conducting such enquiry as he may deem fit.. The person in charge of the check post or the officer authorized under sub-section (4) shall after giving an opportunity of being heard to the owner or the person authorized by the owner or the person in charge of the goods impose a penalty equal to the 30% of the value of goods for possession or movement of goods in violation of provision of clause (b) of sub-section (2) of section 76 or for submission of false or forged documents or declaration .Now the question which comes in our mind is that 30% should be calculated on estimated value or invoice value. Law is silent about the fact and thus it depends upon the officer imposing the penalty. This penalty can be imposed irrespective of the fact whether the goods are seized or not.

Sub-section (7)

This sub-section provides that any person can appear before the person in charge of the check post or the barrier or the officer authorized under sub section (4) during the pendency of the proceeding under sub-section (6) to treat him as a party to the case .The person in charge of the check post or the barrier or the officer authorized under sub section (4) after being satisfied may permit him to be impleaded as a party to the case and thereafter all the provisions of this section will apply to him.

Sub section (8)

 If the goods were seized under clause (b) of sub-section (5) of section 76 but were not released then such goods shall be released by the in charge of the check post or barrier or the officer authorized under sub section (4) on receipt of penalty imposed under sub-section (6) or on receipt of such security for account of penalty as the in charge of the officer consider necessary.

Sub-Section (9)

This Sub section provides that if the owner or the person authorized by the owner or the driver or person in charge of the carrier or the vehicle or goods in movement is found guilty of violation of the provisions of Sub-Section (2) of section 76, then the in charge of the check post or the barrier or the officer authorized under sub-section (4) can after giving an opportunity of being heard, impose penalty @30% of the value of such goods. Under sub-section (6) equal penalty is imposed on account of violation of provision of Clause (b) of sub section 2 of section 76 or on account of submission of false or forged documents on the owner of the goods or the person authorized by the owner or person in charge of the goods. But in sub-section (9) penalty will be imposed on account of violation of not a particular clause of sub section (2) but will be imposed on account of violation of provision of sub-section (2) of section 76 on owner of the goods or person authorized by the owner of such goods or the driver or the person in charge of the vehicle or carrier. Penalty on driver or the transporter cannot be imposed under sub section (6). Under sub-section (6) penalty can only be imposed on owner or the person authorized by the owner or the in charge of the goods but not on the driver or the person in charge of the carrier or the vehicle.

Sub Section (10)

If the goods were seized under clause (b) of sub-section (5) of section 76 but were not released then such goods shall be released by the in charge of the check post or barrier or the officer authorized under sub section (4) on receipt of penalty imposed under sub-section (9) or on receipt of such security on account of penalty as the in charge of the officer consider necessary.

Sub-Section (11)

This sub-section is a standalone sub section of section 76. It means the provisions of this section will apply irrespective of the provisions in other sub sections of Section 76.This sub section provides that in case the driver or the person in charge of the vehicle or carrier abstains from stopping the vehicle at the nearest check post as required under sub section (2) then the in charge of the check post or barrier or the officer authorized under sub section (4) may detain the vehicle or carrier and after giving an opportunity of being heard to the owner or a person duly authorized by the owner or the driver or the person in charge of the vehicle or carrier may impose a penalty equal to 50% of the value of such goods. Thus in this sub-section penalty can be imposed on owner or the transporter both on account of violation of clause (a) of sub section (2) of section 76.

Sub Section (12)

This sub section provides that if the transporter fails to provide the information about the consignor or consignee or the goods as required under clause (d) of sub section (6) within such time or transport the goods with false or forged documents then besides imposing the penalty under sub section (6) it shall be presumed that the goods so transported have been sold in the state of Rajasthan by him and he shall be a dealer to those goods under the act.

Sub Section (13)

 This sub section provides that all the provisions of the act shall apply to the transporter deemed to be a dealer under sub section (12).

 This is what Section 76 of RVAT Act 2003 says. It is very well clear that in case the goods in movement are not supported by the documents as required in Sub section (2) of section 76, then penalty will be imposed. The person on whom penalty imposed can very well file an appeal if not satisfied with the decision of imposing penalty. However instead of paying penalty the person can opt for composition of offences provided under Section 68 of RVAT Act 2003. This section provides that the person admitting the offence committed by him can pay composition money in lieu of penalty or prosecution.

 Let us have a look on Section 68 of RVAT Act 2003

Section 68 (Composition of Offences)

Sub Section (1) :

This sub section provides that if a dealer Is charged with an offence of avoidance or evasion of tax in any manner at any time under this act , then he may make an application to the jurisdictional Deputy Commissioner (Administration) admitting his offence and requesting for composition of offence in lieu of penalty or persecution.

Sub section (2)

The Deputy Commissioner on receipt of application may accept a sum equal to the amount of tax avoided or evaded from the person making the application in lieu of penalty or prosecution irrespective of the fact whether or not the assessment order under any section of this act has been passed.

Sub Section (3)

 This sub section overrides the above mentioned two sub sections. This section provides that the officer authorized under 75(4) or the in charge of the check post or officer authorized under sec 76(4) may accept composition money from the person making an application admitting the offence committed by him under Sec 75(8) or 76(6)/(9)/(11).However the amount of compositing the offence should be:-

(a) Four times of the tax livable on the goods involved or 25% of the value of goods whichever is less in case offence is committed under Sec 75(8) or Sec 76(6)

(b) 15% of the value of goods in case offence is committed under Sec 76(9)

(c) 25% of the value of goods in case offence committed under Sec 76(11)

Sub Section (4)

Sub Section (5)

Once a composition money is paid under sub section (2) or (3) , no further proceeding under the provision of this act for imposition of penalty or prosecution for the same offence will be initiated

Sub Section (6)

Commissioner cannot waive or reduce the amount of interest or composition amount levied under this section

Sub Section (7)

Notwithstanding contained in any other provisions of this act, no appeal can be filed once an order of composition made under this act.

It means the person committing the offence can either pay the penalty under Section 76 or can pay the composition amount under Section 68.

If we go through Sec 76(2) , the it provides that the documents along with declaration form should be carried with the goods in movement. Now the question arises in our mind is what this declaration form stand. This declaration form is nothing but are road permits for exporting the goods outside the state or importing the goods from outside the state of Rajasthan .Vat 47A is for importing the goods from outside the state and VAT 49A is for exporting the goods outside the state. First of all we will discuss about VAT 47A .The VAT 47A is a declaration form required to be carried with the goods while importing goods from outside the state. Provisions in this respect are provided under Rule 53 of the Rajasthan Value Added Tax Rules 2006.Going through this Rule 53 will clear our facts in respect of VAT 47A.

Rule 53 of Rajasthan Value added Tax Rule 2006(Declaration forms required to be carried with the goods in movement for import within the state)

 This Rule provides that if a registered dealer imports notified taxable goods from outside the state of Rajasthan for:-

1. Sale ,within the state or outside the state or
2. Received by way of branch transfer/depot transfer/stock transfer or
3. Consigned to the dealer from outside the state or
4. For use, consumption or disposal otherwise than by way of sale.

 , the dealer shall furnish the declaration in form VAT 47A .This declaration form is required to be carried with the goods in movement. It is to be noted that the word Notified Taxable goods is used here not Taxable Goods. It means the VAT 47A is required not in respect of all taxable goods but are required for the taxable goods notified under the RVAT Act. The state government vides Notification No. F12(84)FD/Tax/2009-21 dated 08.07.2009 notifies the following goods in respect of which VAT 47A is mandatory in case such goods are imported for sale or for use , consumption or disposal otherwise than by way of sale:-

1. All Kinds of furniture including molded furniture
2. All Kinds of Lubricants
3. All kinds of Mattresses, Cushion, pillows, all types of sheets and other articles made from foam rubber or plastic foam or other synthetic foam and rubberized coir mattresses.
4. All kinds of toilets and washing soap and detergents
5. Deleted 09.03.2010
6. All types of bearings
7. All types of sanitary goods including sanitary pipes and fittings
8. All types of electrical goods including UPS and CVTS
9. Deleted 09.03.2010
10. Butter and Deshi Ghee
11. Computer, its software’s , floppies and parts.
12. Cooling Equipment’s including air conditioners and refrigerators
13. Copper in all its forms including wires
14. Dry Fruits including Clove, Cardamom, Pepper and betel nut
15. Raw and refined edible oil and hydrogenated vegetable oil
16. Electronic Items including TV,VCR,VCP
17. Deleted 09.03.2010
18. Iron and Steel as defined under section 14 of CST Act
19. Parts of automobile and tractor except when used in manufacturing of automobiles or tractors
20. Pan Masala , Gutkha and Churi
21. Paints , Varbnishes, Colour and dyes
22. Timber , ply woods , Nuwoods and laminated Sheets
23. Deleted 09.03.2010
24. Tele-Communication and sound transporting equipment including cellular and cordless telephone , Fax and pagers
25. Tea
26. All types of yarn, whether cotton , woolen or synthetic
27. Metallic Utensils
28. All types of crockery
29. Photographic Goods deleted 09.03.2010
30. Plastic goods ,PVC granules except when used as raw material for production of plastic goods
31. Rubber and goods made of rubber
32. All kinds of paper and paper products including exercise books
33. All kinds of tiles
34. Fireworks deleted 09.03.2010
35. Non edible oil deleted 09.03.2010
36. Rice
37. Cotton Seed deleted 09.03.2010
38. All kinds of foot wear

These goods are notified by the state govt in respect of which Vat 47 is required in case imported for sale or for use, consumption or disposal otherwise than by way of sale.

However the notified goods in case goods are received on consignment or by way of branch transfer/depot transfer /stock transfer are:-

All taxable goods other than goods mentioned below to be notified goods for this purpose:-

1. High and Light Speed Diesel Oil , Petrol and Aviation Turbine Fuel and
2. Goods the sale or purchase of which by dealers are exempt from tax under Schedule I
3. Goods the sale or purchase of which by dealers is exempt from tax on the sole condition of obtaining a certificate of exemption with or without payment of any fees
4. Goods the sale or purchase of which by the dealer is exempt from tax on the sole condition of obtaining a certificate of exemption on payment of fees and such exemption certificate has been obtained by the dealer to whom the goods has been consigned
5. Goods the sale or purchase of which by dealer is exempt on the sole condition that the goods recorded in the registration certificate of the dealers claiming the exemption.

 This road permit for importing notified taxable goods can be generated electronically through the official website of the Commercial Taxes Department. To generate VAT 47A, a request is required to be submitted electronically through the official website of department. This VAT 47A generated electronically should be carried with the goods in movement in two copies (Original and Duplicate).While generating the VAT 47A electronically an Identification Number is generated which is communicated to the dealer at the mobile no. given by the dealer. This identification no. can be carried with the goods in movement in place of VAT 47A. However in this case the identification number so generated shall be depicted at the bill/bilty/challan/bill of sale/dispatch memo carried with the goods in movement. Thus here the dealer has two options, First to carry Vat 47A in duplicate or to depict the Identification no. on the documents carried with the goods.

 There might be the cases when the goods covered under single invoice are carried in more than one vehicle. Then in that case we should generate separate VAT 47A for each vehicle which should be carried with the photocopy of other documents with the goods in movement. In this case also the dealer can depict the identification no. as discussed above. However separate identification no. should be depicted for separate vehicle.

 At the time of inspection the owner or the person authorized by the owner or the driver or the in charge of the carrier or vehicle or goods in movement should produce such VAT 47A to the in charge of the check post or the officer authorized u/s 76(4). The in charge of the check post or barrier or the officer authorized shall retain the original copy of VAT 47A and return the duplicate portion after putting his signature and official seal on it. The in charge of the check post or barrier or the officer authorized u/s 76(4) should submit the original copy so retained to the assessing authority or the person authorized. In case after inspection at one place the vehicle or the carrier is again stopped for inspection at any subsequent place then then owner or the person authorized by the owner or the driver or person in charge of the vehicle or carrier or the goods in movement shall produce the counter signed copy of the VAT 47A along with other documents to the in charge of the carrier or vehicle or the officer authorized u/s76 (4).

 These provisions are in respect of goods when the goods are imported through roadways. Now the question arises whether same provisions will apply in case goods are imported through Railways, Airways, and Dry Port or by any other mode. The Sub Rule (8) of Rule 53 provides the provision in respect of goods imported through airways. Railways or dry port authorities or by any other mode. This sub rule states that the VAT 47A is also required to be carried with the goods even if the goods are imported through railways, airways or dry port or any other mode. The railway, airways or dry port authority at the time of booking of goods for any destination in Rajasthan from a place outside the state of Rajasthan shall ensure that VAT 47A or the identification number is accompanied with other documents carried with the goods in movement. The Railway, Airport or Dry port authority shall maintain complete record of the consignee and the person taking the delivery which can very well be demanded by the assessing authority or the person authorized u/s76(4). The assessing authority or the officer authorized u/s 76(4) can even inspect the goods in movement by these means and even can seize the goods if the officers have suspicion of evasion of tax by the dealer by providing VAT 52.

 Moreover the rule provides that the Railway/Airways/Dry port authority will be treated as transporting agency for this purpose of provision of inspection of goods while in movement contained in Sec 76 of RVAT Act 2003 and shall be subjected to all the provisions contained in the Act and Rules including penal action against them.

Thus after have a look on Sec 76 and Rule 53 we have cleared the concept of documents to be carried with the goods and the penalty in case of default .Moreover Section 68 of RVAT Act provides us option of Composing of offence available to the dealer.

Section 76 of RVAT Act 2003 and Rule 53 of RVAR Rules 2006 deals with the cases when the goods are imported from outside the state in the state of Rajasthan. There might be the cases when the goods billed from a place outside to the state of Rajasthan to be dispatched to a place outside the state. It means when the goods only passes through the state but are not dispatched in the state. In that case whether the provisions of Sec 76 will apply or some other provisions are mentioned in the act for these cases. The RVAT Act contains a section Sec 78 which specifically deals with such cases. Section 78 deals only to the transit of goods by road. Let us have a look on this section now.

Section 78 (Transit of Goods by road through the state and issue of transit pass) r/w Rule 55 of the Rajasthan Value Added Tax Rules, 2006

Sub Section (1)

This sub section provides that in case a vehicle or carrier is coming and bound from any place outside the state and carrying any goods bound for any place outside the state but passes through the state of Rajasthan, the owner or the person authorized by the owner or the driver or person in charge of the vehicle or carrier or the goods in movement is required to obtain a transit pass from the In charge of first check post or barrier after his entry into the state. In order to obtain this transit pass the owner or the person authorized by the owner or the driver or person in charge of the vehicle or carrier or the goods in movement is required to submit a dully filled Part A of Form Vat 51 in three copies to the In charge of the first check post or the barrier after his entry into the state. The In charge of the first check post or the barrier can inspect the vehicle and have power to detain and unload the vehicle for verification of the goods. On inspection if the In charge is satisfied then he will fill the Part B of VAT 51 in all the three copies of VAT 51 received from the owner or the person authorized by the owner or the driver or person in charge of the vehicle or carrier or the goods in movement and shall affix the Bar Code and shall authenticate the First and Second copy of VAT 51 by affixing the seal of the check post. The in charge of the entry check post or barrier will retain the third copy with him and will return the duly authenticated first and second copy of the VAT 51 to the owner or the person authorized by the owner or the driver or person in charge of the vehicle or carrier or the goods in movement. The owner or the person authorized by the owner or the driver or person in charge of the vehicle or carrier or the goods in movement shall stop the vehicle or the carrier at the exit check post or barrier and will produce the first and second copy of VAT 51 to the in charge of exit level check post or barrier. The in charge of the exit check post or barrier shall have the same rights in respect of inspection of the goods as are provided to the in charge of entry level check post or barrier. The in charge on being satisfied with the fact that the goods are in same order as is mentioned in Part B of VAT 51, will fill part C of VAT 51 and after affixing the seal of the check post on first and second copy handover the first copy to the owner or the person authorized by the owner or the driver or person in charge of the vehicle or carrier or the goods in movement and will retain the second copy with him and will allow the vehicle to move out of the state. There might be the cases that after entry in the state the vehicle is detained or changed on account of any reason, then in that case the owner or the person authorized by the owner or the driver or person in charge of the vehicle or carrier or the goods in movement shall inform the same to the in charge of the entry check post or to the Asstt. Commissioner of the area nearest to the area of such breakdown within 24 hours. On receipt of such information the in charge of entry check post or the Asstt. Commissioner as the case may be shall extend the period by putting a note to this effect on the second and third copy of VAT 51.

 Now we will discuss about VAT 49A i.e. the declaration form for carrying goods out of Rajasthan for export or in the course of interstate trade or commerce. The provisions related to VAT 49A are under Rule 54 of Rajasthan Value Added Tax Rules, 2006.Have a look on this Rule.

Rule 54(Declaration required to be carried with the goods in movement for export out of Rajasthan or in the course of Inter-State trade or commerce)

Sub Rule (1)

This sub rule provides that a registered dealer is required to produce VAT 49A before dispatching any taxable goods outside the Rajasthan. However the fact whether the road permit VAT 49A is required in case of particular transaction or not, depends upon the purpose or the way for which we are dispatching taxable goods outside the Rajasthan. Given below the list for which VAT 49A is required to be carried with the goods in movement. Here taxable goods mean all the goods except the goods mentioned under Schedule I.

First case: If the taxable goods are dispatched outside the Rajasthan for sale or by way of Branch Transfer /Depot Transfer /Stock Transfer

 VAT 49A is required to be carried in respect of all taxable goods except the goods mentioned below:-

1. Cement
2. Chemical Fertilizers
3. Automobiles
4. Tires and Tubes of automobiles

 These goods are notified vide Notification Nol. F12(84)FD/Tax/2009*23 DATED 08.07.2009

Second Case: If the taxable goods dispatched outside the Rajasthan in the course of Inter-state trade or Commerce

VAT 49A is required to be carried with the below mentioned notified goods:-

1. Jeera
2. Iron and Steel excluding stainless steel
3. Soya Bean
4. Gram(Chana) and its dal
5. Dhania
6. Tendu Patta
7. Raw and refined edible oil
8. Oil Seeds

 These goods are notified vide Notification No. F12(84)FD/Tax/2009-24 dated 08.07.2009 by the State Government.

Third Case : If the goods are dispatched in the course of export u/s 5(3) of CST Act, 1956

In this case VAT 49A is required to be carried in respect of all taxable goods. Here a taxable goods means all goods except the goods mentioned in Schedule I.

The remaining provisions in respect of this VAT49A is same as we study about VAT 47A.

GST Rate Schedule for Goods in India