Multi State Vat Budget Changes-2016-17

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Core TeamTechnical Guide on Business Controls, Monitoring and Internal Audit of Construction Sector & Simplifying Multi State VAT on Works ContractsAuthored

Mr. Sandesh Mundra Indirect Tax & Management AuditMr. S N Mundra CompliancesMr. Samir Siddhpuria VAT Mr. Philip Fernandes ExciseMr. Pritesh Soni EngineeringMr. Dinesh Kavi Labor LawsMs. Suman Mundra Management AuditMr. Sanjay ChristianManagement AuditMs. Pooja Jajwani Indirect Tax Consulting


Budget 2016Changes in VAT of Major States in Budget 2016-17


States CoveredPunctuality is always an issue with us. The same is with the Indian States. Hence, till date following states have came out with their Budgets:-


Let us check that whether the budget of these states proposes a change for respective State VAT


Let us begin with Central India1 Chhattisgarh


Let us begin with Central IndiaChhattisgarhChanges in VAT Rate:Products exempted from Tax:-Cycle / Cycle parts, Ghee, Pannier and Khova manufactured within state, Batter of Idly and Dosa, Cleaning devices such as Broom (Jhadu), Moup (Pochha), Brush and Wipers (Swach Bharat Abhiyan)Exemption to precast sold to builder doing construction under affordable housing scheme

VAT on following products is increased:-Rate of VAT of 14% enhanced to 14.50%.Coconut oil taxed @14.50%.


1 Chhattisgarh

VAT on following products is decreased:-On Wire Nails from 14% to 5%.On Mobile handset from 14% to 5%.Iron Ore, Pig Iron, Iron Ore Pellet, Sponge Iron, Ingot, billet and Ferro Alloys VAT reduced to 2%. (now these goods can be sold in Central without C-form @2%)Electro forged Gratings rate of CST reduced to 1% with C-form.Reduction in rate for LED Bulbs and light from 14% to 5%

Input Tax CreditNo ITC available where the finished goods are exempt by way of Notification ITC ZERO percent in case of goods stock transferred.No ITC allowed for goods exported outside the state.


Payment of Tax, Assessment and AppealsProvisions of Revision withdrawn. Now, Dealer will file only Appeal within 30 days from receipt of order with required part payment. Provisions for suo-moto Revision by Commissioner to continue Part payment % in first Appeal enhanced from 10% to 15%.Penal rate of interest withdrawn, now it would be flat 1.50% only.One time facility to revise Annual Statement.

1 Chhattisgarh


1 Chhattisgarh

Minimum 90% of the quarterly tax payable needs to be deposited within 15 days from quarter end. Provisions of monthly tax payable by 10th would continue. Tax for the 3rd month which was now payable by 30 days would now be payable within 15 days (of course, 90% of the said tax).

For tax evasion of under assessment, with penalty interest would also be levied. Earlier only penalty was their. The provisions of penalty of 5 times has now been reduced to 1.5 times to 2 times.

On delay payment of composition fee, now interest would be payable.


1 Chhattisgarh

Time extension for disposal of assessment cases of 2011-12 & 2012-13Chhattisgarh Government vide Notification No. F-10-12 /2016/CT/V (19). dated 22nd March, 2016 has extended the due dates for completion of assessment and reassessment proceedings for every dealer which are as follows: Should have been completed byEarlier Extended Due DateRevised Extended Due Date31.12.201431.03.201631.05.201631.12.201530.06.201631.08.2016

The Government through this notification has granted time to the assessing officers to complete pending assessments / re-assessments.


2 Moving to Madhya Pradesh


2. Madhya PradeshFollowing products are exempted from Tax:-Bicycles within MRP of Rs.10k Bio-insecticides and bio-pesticidesBry ber and ber powderAll kinds of electric/battery upto two wheelers, car and rickshawMilking MachineBags and envelops made of biodegradable materialVAT on following products is increased:-On Gas stove is increased from 5% to 14%On glass mirror from 5% to 14% On Heavy goods carriage vehicle, gross vehicle weight of which is more than 12000 kgs is 14%


2. Madhya PradeshVAT on following products is decreased:-List of goods on which VAT rate is reduced from 14% to 5%Tali and Katori made from paper Soya milkParts and accessories of bio fuel based smokeless stove, gas stove and induction cook-topBicycle MRP more than Rs.10K and parts (including tyres and tubes) and accessories thereofDialysis machine and dialysis consumablesPowers is given to State Government to fix minimum amount of tax on the basis of weight, volume, measurement or unit for goods specified in Part IIIA of Schedule II (Contains goods like diesel, petrol, Natural gas, Tendu leaves, Timber, Liquor, Cigarettes etc)


2. Madhya PradeshInput Tax CreditIn Section 14 Rebate of Input tax, sub-section (1) before amendment was:- a) Where a registered dealer purchases any goods specified in Schedule II other than those specified in Part-III and Part-IIIA (Goods on which rate of tax is specified therein eg.- Fuel, Kerosene, Capital Goods) of the said Schedule within the State of Madhya Pradesh from another such dealer after payment to him input tax for,- (1) sale within the State of Madhya Pradesh or in the course of inter-State trade or commerce or in the course of export out of the territory of India; orAfter amendment this clause is amended as Section 14(1)(a)(1) - sale within the State of Madhya Pradesh or in the course of export out of the territory of India; orA new clause is added as Section 14(1)(a)(1a) - sale in the course of inter-State trade or commerce; or

Par se it was not required but then a new provision added which says that on disposal of goods specified in Section 14(1)(a)(1a), input tax rebate equal to the amount of Central Sales Tax payable, would be allowed. In this provision, sale in the course of export and sale in the course of inter-state is distinguished hence, insertion of new clause Section 14(1)(a)(1a) is justified.


2. Madhya PradeshPayment of Tax, Assessment and AppealsMaximum interest rate in case of discrepancy in return increased from 1.5% to 2%.TDS liability on CG, SG or PSU on payment to dealer pursuant to a contract of sale/supply of goods to them. Now, the scope extended to every person making payment to any dealer. Person for TDS on works contract was already prescribed and now is extended to TDS on contract between person and dealer for contract of goods supply as discussed above.


2. Madhya PradeshSome additions to the scope of person as referred above are made:-i). All Dental colleges recognized by Dental Council of India and hospitals associated to such dental colleges,ii). All Medical colleges recognized by Medical Council of India and hospitals associated to such medical collegesiii). All recognized universitiesTDS rates changed to 2% for RD and 3% for URDA new Section 28-A Provisional attachment to protect revenue in certain cases has been inserted.A time limit of 60 days has been prescribed for setting aside an exparte order


Shifting to South IndiaAndhra Pradesh


Andhra PradeshChanges in VAT Rate:Sugar is exempted from levyVAT on following products is decreased:-Tax rate on furnace oil is decreased to 5% from 14.50%VAT on following products is increased:-Liquor and beer Section 4-A introduced for Levy of tax on Sales of High speed diesel and Furnance Oil to foreign going international ships @ 0.5% and to coastal ships @ 5%Purchase tax made applicable to dispatch outside state other than sale in the course or interstate trade and commerce or export out of India


1. Andhra Pradesh

Input Tax CreditZero rated sale defined as sale taxable @ 0% but eligible for ITCA dealer can claim ITC if the selling dealer has paid the tax in respect of the same goodsITC on purchases which do not have corresponding sales will have to be reversedA purchasing dealer purchasing an on-going concern will be eligible to claim ITC as on the date of such transfer if he continues to do same business

Payment of Tax, Assessment and AppealsTDS mechanism and TDS rates are prescribed for some lease and hire purchase transactionsVAT Audit provisions are introducedPenalty and Interest introduced if there is any failure in respect of deduction or in respect of remittance


1. Andhra Pradesh

Time limit for filling of appeals have been amendedInterest rate on refund is increased to 1.25% from 1%Penalty @ 5% is levied if dealer does not upload the tax invoices as prescribedPenal provisions for failure to present in summons is been amended

Procedural AmendmentsTo improve VAT collection, government has proposed instituted measures like Invoice Tracking, Modernization of Check Posts, Deployment of Technology, Tax Analytics, etc.If appellate tribunal is not in position to work then, Commissioner may decide period of time to be excluded from the time limit of filling appealSome amendment in powers of officer at check post and penal provisions are done in provisions of Check post


2. Time to visit Karnataka


2. KarnatakaChanges in RateFollowing products are exempted from Tax:-Paddy, rice, wheat, pulses and products of rice, wheat and Ragi Rice (Processed Ragi) for one year. Jowar Roti, Ragi Roti, Aluminium house hold utensils and Crude Oil.Handmade paper, hand-made paper boards, and handmade paper products manufactured and sold by a dealer recognized by the Karnataka Khadi and Village Industries Board. VAT on following products is decreased:-Cotton from 5% to 2%. From 14.5% to 5.5% on Chatnipudi prepared from: Groundnut, Nigar seeds, Copra, Bengal gram, Garlic, Flax seeds and fried gram. Tax reduction from 14.5% to 5.5% on Office files made of paper and paper boards, Adult Diapers, certain articles of nickel and titanium, Hand operated Rubber sheet making machines, set top boxes for viewing Television content, Surgical; gowns, masks, caps and drapes of single use made of Non-woven fabrics, Multi-Media Speakers, Helmets and LED Bulbs.


2. KarnatakaVAT on following products is increased:-VAT increased from 14.5% to 20% on aerated and carbonated non-alcoholic beverages. Increase in rate of tax on petrol from 26% to 30% and diesel from 16.65% to 19%.

Input Tax CreditClarification that amendment shall be prospective w.e.f. 01.04.2015. Amendment was that ITC is eligible, provided it is accounted and claimed in return filed during the same or within five tax periods. ITC disallowed if failure to comply with uploading of sale and purchases statement (e-Upass). (Welcoming step for GST)ITC charged in excess of 2% on cigarettes purchased relating to interstate sale against C form


2. KarnatakaPayment of Tax, Assessment and AppealsAssessment under (Section 38-Assessment of Tax) to include cases relating to the dealers who file incorrect/incomplete returns. Penalty under section 72 (Penalties relating to Returns) if revised returns resulting in tax liability of more than 5%. The entry 4 under schedule VI (works contract) is reworded to remove etc. Therefore, only structural works contract of iron trusses, purlines and the like would get covered under entry 4. (Existing Entry 4 - Fabrication and erection of structural works, including fabrication, supply and erection of Iron trusses, purlines etc.)


2. KarnatakaProcedural AmendmentsScheme to recognize and honour five diligent tax payers in each of Bengaluru based divisions and three each from VAT divisions other than Bengaluru. Module for transportation of goods that will allow transporters to upload the details of goods being transported online for hassle-free movement of goods. Development of mobile application for the benefit of small dealers. Issue of online refunds to the eligible dealers. Online service of statutory proceedings using digital signature certificates.


3. Moving to Tamil Nadu by Chennai Express


3. Tamil NaduInput Tax CreditPreviously, ITC can be availed if seller has charged any tax on his invoice for sale but now ITC can be availed only if the selling dealer has paid the tax componentBurden of proof on the purchasing dealer to establish that (i) the tax, due on such purchases, has actually been paid by the seller and (ii) the goods have actually been delivered to the buyer. The former has been made to neutralise the effect of various judgments, like Althaf Shoes (P.) Ltd. [2012] 50 VST 179 (Mad), which have held that non-payment of tax by the seller cannot be a reason to deny ITC to the purchaser, so long as the sellers invoice shows the tax amount. This is in line with the proposed GST law, wherein credit of GST paid can be availed only where the supplier has paid the tax, and the burden to establish the same will be on the purchaser.


3. Tamil NaduPayment of Tax, Assessment and AppealsSection 6 (Composition scheme for works contractor) had a restriction if dealer has done inter-state purchases then, he is ineligible for Composition scheme. Now, stock transfer is also brought under the condition net.As per Section 3(4), small dealers who effect second and subsequent sales of goods purchased within the state are required to pay tax only @ 1%. The provision is amended to include that now, this provision is applicable only to such dealers who purchase goods from registered dealers in the state Under Section 27 (Assessment of escaped turnover and wrong availment of ITC), the penalty has been increased to 300% (previously, it was 50% penalty on the first detection and 100% thereafter). (This appears to be an extremely onerous condition on the assessee, as the provision for reassessment under Section 27(2) is very wide, and is not limited to any act of malafide or suppression, unlike Section 27(1). Even in the case of Section 27(1), (prerequisite is the dealer having escaped assessment to tax), the corresponding penalty provision, i.e., Section 27(3) does not go beyond 150%. Due to this, there is a clear anomaly in the provision.)Increase in time period for maintenance of books accounts has been increased from 5 years to 6 years.Assessment of casual dealers based on scrutiny of returns and procedures for filing appeals, revisions and reviews have been made.


3. Tamil NaduProcedural AmendmentsRegistration, maintenance of records and filing returns Registration procedure computerised and application for registration and payment of registration fee made online. TIN and RC will now be issued electronically in Form D within two working days of the application, if the application is properly made.Amendment to the RC also needs to be done electronically.A dealer is deemed to be registered if he does not receive either the RC or any notice from the authority within two working days. TIN shall be automatically assigned to the dealer. Dealers maintaining the records electronically are to maintain and furnish electronic Form G1.Filing of returns and payment of tax are to be made electronically.


3. Tamil NaduDealers exclusively dealing with goods exempt under the Fourth Schedule (Goods exempted from Tax u/s 15) should also file the return in Form I-1 (which was previously applicable only for dealers who were making exempt sales in terms of Section 30). (Section 15 is Exempt sale and Section 30 deals with power of government to notify exemption or reduction of tax)Another major amendment is the documentation required during movement of goods in the State. Previously, the documents required were (i) Bill of Sale / Delivery Note in Form JJ(ii) Goods Vehicle Record / Trip Sheet / Log Book.


If, after filing the returns, the dealer realises that it had failed to claim the ITC (other than by way instance of the assessing authority), revised returns can be filed within the later of

(i) end of the financial year or (ii) ninety days from date of purchase.

This is also in line with the time limit for availment of ITC as prescribed as per Section 19(11). (Section 19 Input Tax Credit)3. Tamil Nadu


The amendment stipulates the additional documents as (i) the transporters waybill in Form MM (ii) if the movement is by a C&F agent, a declaration by him in Form KK. Specific documentation requirements have also been given for movement of goods. In cases where the (i) export is made from the state, (ii) export is made from outside the state (iii) goods are cleared by Customs on import. Further, where certain notified goods are coming from other state, an advance inward waybill is required to be furnished.

3. Tamil Nadu


3. Tamil NaduExemptionsRestriction on benefits for sales to SEZs in the State As per Section 18(1)(ii) (Section 18 Zero Rating), sale of goods to registered dealers in SEZs in the state is zero rated. After the amendment, this benefit has been limited to for the purpose of use in manufacture, trading, production, processing, assembling, packing or for use as packing material or packing accessories. It has also been clarified that (i) sales made to dealers for setting up, operation and maintenance of SEZ unit are not zero rated and (ii) sales made to SEZ developers for development, operation and maintenance of an SEZ are merely exempted from payment of tax.


4. To Kerala


4. KeralaChanges in RateFollowing products are exempted from Tax:-With continuation of exemption for LNG, State proposes exemption on cardamom sold at auction centres. Exemption is given to food cooked by prisoners in jail with retro effect. VAT on following products is increased:-With view to prevent pollution, proposal to tax plastic bags at 20% VAT is made while a surcharge of 5% shall be imposed on used plastic bottles.


4. KeralaInput tax creditKerala Govt. has proposed a unique and logical provision for claim of Input tax Credit, it proposes to allow ITC to subsequent dealers towards differential tax remitted by first seller on account of tax rate classification disputes.


Payment of Tax, Assessment and AppealsCommittee shall be set up to resolve inconsistencies of HSN code given in Schedule leading to classification and tax rate issues. In view of impending GST and large number of pending assessments and appeals, Commercial Tax Dept will be scientifically restructured and strengthened, and its website shall be revamped to make it informative, user friendly and interactive;

ExemptionsIt is proposed to explain that SEZ related exemption for building materials will be unqualified. 4. Kerala


5. Telangana New born State


5. TelanganaInput Tax CreditState Government has announced The Telangana Solar Power Policy 2015 with the objective of harnessing the vast solar power potential in the State. Under the policy, for development of solar parks, government has proposed to provide for 100 % refund of VAT on all inputs for a period of five years.Procedural AmendmentsEase of Doing BusinessProvisions are amended so that the authority prescribed have to issue Certificate of Registration within one working day on submission of complete application with documents.


3. Let us take a tour to North Region1. Punjab


PunjabChanges in RateFollowing products are exempted from Tax:-Punjab Govt. proposes to abolish VAT of 6.05% on raw honey and bee keeping equipment as well as pig feed to promote piggery in the StateTo incentivize setting up of new food processing units, Budget does away with taxes on agricultural inputs for all units that come into commercial production after October 28, 2015 VAT on following products is decreased:-Gives relief to textile & spinning industry by reducing VAT on cotton and other types of yarns, excluding 100% polyester filament yarn, from 6.05% to 3.36%


Punjab

Procedural Amendments

Government proposes to launch Apna Tax Scheme with objective to encourage customers to procure bills from retail vendors which would ensure tax compliance in systematic, non-intrusive and non-regulatory manner


2. UttrakhandNo change


3. Coming to Uttar Pradesh


3. Uttar PradeshChanges in RateFollowing products are exempted from Tax:-No levy on the turnover of sale ofmachinery operated by cent percent Bio Fuelin the State of Uttar Pradesh, for the period of ten years with effect from September 12, 2015.L.E.D. bulbs is exempted from tax


4. Next is Himachal Pradesh


4. Himachal PradeshChanges in RateFollowing products are exempted from Tax:-Exemption of VAT for Electric vehicles for five years Solar Cooker and Solar lanterns will be exempted from VAT. VAT on following products is decreased:-VAT on LED lights reduced from 13.5 to 5 percent. Payment of Tax, Assessment and AppealsWe will also ensure timely VAT refunds to industries by simplifying the procedure as well as by regular monitoring.Small Traders with turnover upto Rs.30 lakh covered under lump-sum tax payment scheme at the rate of 1 percent.Dealers up to turnover of Rs.1.50 crore covered under Deemed Assessment Scheme.


Mandatory e-declaration in Form VAT-XXVI by dealers before dispatching taxable goods of value aggregating Rs. 30,000/- or more in the course of inter-state transactions.

Declaration shall also be furnished by a single registered dealer who dispatches goods in a single vehicle to multiple purchasers valuing more than Rs 30,000/- within the State of Himachal Pradesh.

Class of dealer or the goods on which this notification would be applicable will be notified by the State Government.In favor of small dealers who were required to file e-declaration even for dispatching goods of small amounts.

This notification has also been issued to track movement of goods during their inter-State movement and intra-State movement in the case of multiple customers. Most States in India have such provisions in their Statutes relating to movement of goods.4. Himachal Pradesh


5. Haryana on fifth


5. HaryanaChanges in RateFollowing products are exempted from Tax:-To encourage setting up of more footwear industries in the State, VAT on shoe uppers is exempt. In order to encourage agrobased industries in the State, Khal, Binola, Besan and cotton yarn manufactured is exempted from taxTo provide relief to households and to encourage the Micro and Small Enterprises in the State, it is proposed to exempt Chhota Toka (leafy vegetable cutter for kitchens) from payment of tax.VAT on following products is decreased:-It is proposed to reduce tax rate on footwear having MRP above Rs.500 from 12.5 per cent to 5 per centTax on Vermicelli (Sewian) is reduced from 12.5 percent to 5 per cent to give incentive to industries, which use agriculture produce of the State for manufacturing.To promote clean environment, it is proposed to reduce tax rate from 12.5 per cent to 5 per cent on sale of electrical vehicles.


5. HaryanaProcedural AmendmentsTo encourage the customers to obtain bills / invoices for goods purchased, it is proposed to introduce Submit Bill, Get Prize Scheme. This will enhance compliance on the part of the sellers / dealers, resulting in more revenue to the State exchequer.Amnesty schemeProposal for introduction of amnesty scheme, granting relief in respect of tax, interest, penalty and other dues to the affected registered dealers whose goods have been lost or destroyed during the reservation agitation in February 2016 is made.


6. Delhi The Capital of India


6. DelhiChanges in RateVAT on following products is decreased:-VAT rate on battery operated transport means i.e. e-rickshaw, battery operated vehicle and hybrid automobile has been proposed to be reduced from 12.5% to 5%. VAT on Sweets and Namkeens has been proposed to be reduced from 12.5% to 5%.Tax rate on readymade garments costing above Rs.5,000/- has been proposed to be reduced from 12.5% to 5%.VAT on marble is proposed to be reduced from 12.5% to 5%. VAT rate on watches costing above Rs.5,000/- has been proposed to be reduced from 20% to 12.5%.Rationalization of tax on textiles and fabrics by applying uniform tax of 5% on all varieties of textiles and fabrics (including sarees except khadi and handloom fabrics) has been proposed.


6. DelhiIn the existing entry of Ferrous and Non-ferrous metals, there is no mention of aluminum or metal sheets, and some items are taxed at higher rate of 12.5%. To remove an ambiguity, it is proposed to modify the entry as Ferrous and non-ferrous metals and alloys thereof including their sheets, foils and extrusions. Non-ferrous metals includes aluminium, copper, zinc etc. Currently footwears costing above Rs.500/- and school bags costing above Rs.300/-are taxable @12.5%. It is proposed to apply uniform VAT rate of 5% on all kinds offootwear and school bags irrespective of price.VAT on following products is increased:-Tax on plastic waste has been proposed to be levied @5%. It was previously exemptedVAT on UPS units has been proposed to be increased to 12.5%.


6. DelhiTobacco and tobacco products are currently taxable @20%. The relevant entry reads as under :-Tobacco and Gutkha, unmanufactured tobacco, bidis and tobacco used in manufacture of bidis and hooka tobacco. In order to make it more comprehensive, it is proposed to modify the entry as under :-Un-manufactured tobacco, tobacco and tobacco products in all forms such ascigarettes (irrespective of form and length), chewing tobacco, gutkha, cigars, hookahtobacco, khaini, zarda, surti, bidis etc.Procedural AmendmentsBy launching of new scheme "Bill Banvao Inaam Pao" powerful impetus has been given to public participation. An award scheme has been launch for "Market Association"


VAT deduction at source in respect of works contract- advisory to Govt. deptt.

All the government departments have been advised to deduct tax at the source and deposit the same with the Trade & Taxes Department. This Circular has been issued considering the fact that some of the Government Departments are carrying out works contract activities by assigning various departmental contracts to the contractors without deducting any tax at source. Further, failure to deduct and remit would tantamount to non-compliance of the law attracting penal provisions.6. Delhi


6. DelhiPayment of Tax, Assessment and AppealsDelhi HC in has noted avoidance of multiple authorities. So assessment of all cases, pursuant to Enforcement surveys, to Ward Officers concerned except cases, for which proceedings has been transferred by the Commissioner through a separate order. Accordingly, all officers, are directed to transfer the aforesaid cases to the concerned Ward Officers immediately. Ward authorities to ensure that assessments are completed within the time frame specified.Circular has been issued to ensure dealers are not harassed by both Enforcement Authorities as well as assessing Officers. Principles laid down by the Honorable Delhi High Court is summarized as follows: Any survey/ search or seizure conducted after obtaining prior approvals from the Commissioner and it within his jurisdiction. Instructions by Commissioner must be specific without ambiguity; Enforcement Officers to conclude only if he is permitted to do so by Commissioner Reversals of input tax credits must not be arbitrary and as per law; Enforcement Officers, unless provided, cannot collect taxes on the spot; Commissioner hold regular orientation courses in consultation with Delhi State Judicial Academy.


1. To start with Rajasthan 4. West India


RajasthanChanges in RateFollowing products are exempted from Tax:-Solar Torch, Biomass Stove, Kerosene lamp/ Hurricane lantern, Kerosene wick stove, Kerosene pressure stove and parts thereof.Lai, Pattu, Camphor, Ghunghru, Saw dust, Sugarcane, Sattu, Khakhra, Unbranded toast or rusk.Articles of Marble up to Rs. 1000/- per item.Sewing needle, Safety MatchesGanga Jal, Ganga Arghya packed in sealed containers and not meant for drinking water purposes.Earthern Roofing Tiles (Kelu)Animal Shoe Nail, Rubber Playball & BalloonsHand Pumps, Parts and fittingsGoods produced in jails War widows, retired army personnel and their widows, defence personnel etc. to be included for VAT benefits in CSD canteens.


1. RajasthanVAT on following products is decreased:-VAT on all types of yarns reduced from 5.5% to 2%.VAT on motor vehicles having Gross Vehicle Weight of 12000 Kg and more reduced from 15% to 13%.VAT on Pan reduced from 14.5% to 5.5%.VAT on following items has been reduced from 14.5% to 5.5%.Measuring Tape & Vernier Calipers.Dental Filling & Fixtures.Pickle excluding branded pickle.All types of Plastic goods including plastic grills and unbranded plastic moulded furniture.All types of carpets.Switchgear. SD card, memory card, pen drive. Health fitness and gymnastic equipments, fat losing belts, body vibrating items, morning walker, acupressure machines, thermal massager.VAT on following products is increased:-VAT on aerated drinks increased from 15% to 20%.5.5% VAT on semi-stitched garments and Gwar gum and Gwar gum powder.VAT on all types of cigarettes increased by 15% on the existing specific VAT rates.


1 RajasthanPayment of Tax, Assessment and AppealsRate of TDS for contractors reduced to 3% from 6%.Concessional CST rate of 0.25% on interstate sale by the enterprises established in Japanese Zone and Korean Zone, is extended up to 31.03.2017 or implementation of GST whichever is earlier.State Government empowered to waive off late fee imposed for non filing/delayed filing of return by a dealer. Time limit for disposal of rectification application of dealers to be reduced to six months in place of one year.Facility for revising Form VAT-40E (Statement of works contract and tax deducted to be furnished by the awarder) given to awarder till 3 months from the close of the financial year.


1 RajasthanDealers allowed exercising option regarding place of audit to be conducted under business audit.Time period for finalizing assessments for 2013-14 is extended up to 31.07.2016.Builders and Developers now given facility of depositing project wise lump sum tax.Builders and Developers are not required to deduct TDS of registered sub contractors.Deputy Commissioner authorised to extend period for rectification of mistake in online generated declaration forms by 6 months in addition to the present time limit of 6 months.Generating set included in capital goods with a view to facilitate investment in industrial units.


1 RajasthanProcedural AmendmentsEase of doing businessInstead of multiple forms, a single unifiedonlineform for registration and return for all the taxes.Dealer can obtainonlineRegistration Certificate without visiting Commercial Taxes office by filing digitally signed online application.Appeal, applications forms like waiver and rectification etc. have been madeonline. Demand and Collection registers (DCR) for all the taxes have been madeonlineso that dealer can get information about his outstanding duesonlinewithout visiting Commercial Taxes office.Time limit reduced to 30 days in place of 60 days for changing the principal place of business for a dealer under ease of doing business.Online refund procedure simplified for the dealers.


Dealers who shift from Form VAT-11 (Annual Return) to From VAT-10 (Quarterly Return) are not required to file return for previous quarters.Contractor holding Exemption Certificate but making sale of leftover taxable goods in a project may file return in Form VAT-11 (Annual Return).Early refund or refund adjustment to be given to the dealers in case where time period in challan is wrongly mentioned or excess amount is deposited.Dealers to be allowed facility of digital signatures for invoice along with normal signatures.TDS certificate would be automatically generated in dealers profile in case awarder files VAT-40E(Statement of works contract and tax deducted to be furnished by the awarder) onlineso that dealers are not required to personally present it before the assessing authority.Provisions of e-transit pass to be made from 01.08.2016 on selected commodities. This e-transit pass may be generated through mobile app also.Amnesty schemeTime period of Amnesty scheme under VAT is extended up to 31.03.2016.

1 Rajasthan


2. Time for Apno Gujarat


2. GujaratChanges in RateFollowing products are exempted from Tax:-Bamboo and bambooarticles (except furniture)Pedal Rickshaw & cycle rickshawMosquito netSanitary napkins & adult diapersFrozen semenVAT on following products is decreased:-Ceramic products are proposed to be charged at a lower tax rate.Further, rate of electricity duty charged from hotels/ restaurants & private hospitals is proposed to be reduced.


2. GujaratVAT on following products is increased:-Vehicles purchased by institutions (institutional purchases)Luxury car/ SUV & luxury two wheelerPan MasalaIt has also been proposed to levy tax (including additional tax) on industrial salt used in manufacture of goods.E-Commerce Transactions to be covered under purview of Entry TaxIt has been proposed to impose Entry tax on the goods coming in the State through e-commerce as the trade of State dealers is affected adversely & also the State suffers loss of tax revenue due to sale of goods in the State from outside the State under e-commerce transactions.


2. GujaratProcedural AmendmentsPay 100% provisional refundwithin 30 daysto small dealersIn order to promote trade friendly measures in case of small dealers, it has been proposed to pay 100% provisional refundwithin 30 daysfrom the date of submission of all documents where refund due is upto Rs. 1 lakh. This will be subject to the following conditions:The dealers whose annual refund upto Rs. 1 lakh has been paid in the previous year will get this benefit in the subsequent year.The dealer should be holding Registration Certificate for more than 2 years.


Amnesty Scheme The recovery of tax dues under the Sales Tax Act and the VAT Act has been pending due to issues of interpretation, non-availability of statutory forms and pending before Appellate Authority etc. Thus tax amount actually due to the State remains outstanding. To address this Amnesty Scheme has been proposed as follows:Dues outstanding upto 31.12.2015 in the Sales Tax Act, VAT Act, Motor Spirit Act and CST Act will be covered under the scheme.Interest and penalty will be remitted on full payment of outstanding principal tax amount. However in case of tax evasion, full amount of principal tax, interest and 25% of penalty amount will have to be paid.The scheme will extend to the cases in appeal also where the appeal has been withdrawn.

2. Gujarat


3. Goa


3. GoaChanges in RateVAT on following products is increased:-Motor Spirit from 15% to 22%, Aviation Turbine Fuel (ATF) from 12.5% to 18%, Regasified Liquefied Natural Gas (RLNG) from 20% to 30%, Luxury Cars & SUVs > Rs 15 lakhs and 2 wheelers > Rs 2 lakhs from 12.5% to 15%; ThresholdsIncreases registration threshold limit from Rs 5 lakhs to Rs 10 lakhs, providing much needed relief to small time and new entrepreneurs from hassles of tax compliance and paperwork.Enhancing registration threshold limit from Rs 1 lakh to 5 lakhs for importers & manufacturers;Payment of Tax, Assessment and AppealsVAT Act is amended to provide for 10% of disputed dues at first appellate stage; As a measure of transition towards GST.Amnesty schemeProposes formulation of Settlement Scheme in order to reduce disputes before Courts and Appellate Authorities, alongwith a Scheme to adjust and refund excess Input Tax Credit (ITC) in varying proportions;


4. Trip to Maharashtra


4. MaharashtraChanges in RateFollowing products are exempted from Tax:-VAT on the Mammography machines used for detection of breast cancers exempted.VAT on Retrofit kit fitted to vehicles for physically handicapped exempted.Exemption of VAT on Warping and Sizing of Yarn for promoting the Textile Industry.VAT exempted on the Bamboo Products excluding Bamboo furniture.VAT on following products is increased:-Rate of tax on commodities covered under 5% is enhanced from 5% to 5.5%,excluding declared goods.VAT tax on Coconut hair oil sold in pack upto 500 ml enhanced to 12.5%.VAT on following products is decreased:-VAT on sterile water for injections reduced from 12.5% to 5.5%VAT on LED Tubes reduced from 12.5% to 5.5%.VAT on Pyrolysis Oil reduced from 12.5% to 5.5%.VAT on Steel Wire Mesh, Barbed Wire and Chain links reduced from 12.5% to 5.5%.VAT on Pencil Box, Stapler pins, Dusters, Gum and Gum-sticks used by student reduced from 12.5% to 5.5%.


4. MaharashtraProcedural AmendmentsLooking forward to GST regime, State has done following changes:- Implementations of SAP based Computer system in Sales Tax Department. Input Tax Ledger to be made available to the tax payer.Pilot Project will be started by Sales Tax Department for implementation of Digital Billing system.Amnesty SchemeAmnesty for tax administered by Sales Tax. For dues upto 31 March, 2005 subject to full tax payment, the interest and penalty shall be waived and for disputed dues from 1st April, 2005 to 31st March, 2012 subject to full tax payment, and 25% interest payment under VAT Act, balance dues waived.


5. East RegionWest Bengal


Threshold Turnover for paying VAT is change from Rs. 5 lakhs to Rs. 10 lakhs. (20k Delaers to be out of VAT)

Audit report by CA has to be compulsorily filed by the dealers. It is proposed to increase the threshold from Rs.5 crore to Rs.10 crore. (For Relief to SME and small Dealers)If annual turnover less than Rs. 5 crores then, self-audit statement to be filed. Limit exceeds to Rs. 10 crores. West Bengal


Input Tax CreditITC on duty credit scrips, at present is allowed only to the traders. It is now proposed to extend this benefit also to manufacturers in order to boost exports from the State. Payment of Tax, Assessment and Appeals Simplification of assessment No demand above Rs. 20,000 can be raised unless the dealer is be given an opportunity to present his case on receipt of the gist of the proposed demand. This will reduce litigation and also provide relief.

Presently upon disposal of an appeal petition, case sent back to AO for issuance of revised demand notice, thus causing delay. Proposed to issue a revised demand notice along with the Appellate Order itself. West Bengal


Post-assessment refund within one month of issue of the order and dispose all pending cases within September 2015.Dealers not entitled to preassessment refund if combined export and inter-state turnover exceeds 50% of the total turnover. Proposed to allow refund benefit to dealers having combined turnover of export and inter-state sales exceeds 50% of the total turnover. Amnesty Scheme To introduce amnesty scheme for URD for registration upon payment of reduced tax on their self-declared turnovers for past periods without payment of interest and penalty. Period from 01.04.2015 till 31.07.2015.A Settlement of Dispute scheme in which dealers can discharge their past liabilities by paying a fixed percentage of past dues with full waiver of interest and penalty for assessment cases pending in appeal or revision as on the 31st day of January, 2015. Last date for making application for such settlement will be 31st July, 2015. West Bengal


2 Wel come to Bihar


2. BiharChanges in RateVAT on following products is increased:-For minimize impending huge financial loss of more than Rs 4000-5000 crore for proposed ban on the country made liquor/spiced from April 01, VAT is increased on 12 items including fabric, auto parts, dry fruits, electrical goods, sweets, saari, sand, cosmetics with immediate effect. In all most of these items, 14.5% VAT would be introduced soon after the government notification is issued.If the price of each saari exceeds the rate of Rs 2000 Vat @ 5%. Earlier there was no taxes on it. Similarly one will have to pay 5% extra for buying fabric worth Rs 500 per meter.On Sweets at the rate of more than Rs 500 per kg tax @ 14.5% will be levied. Similarly additional 14.5% tax would be levied on branded packed items like flour, maida, sujji, besan, namkeen, samosa, nimki, kachauri, bhujia, chanachur, dalmote, potato chip, salted peanuts. Earlier there was no taxes on these items.


2. BiharThe existing five percent tax on the purchase of dry fruits would now be 14.5%. Similarly on the purchase of battery and auto parts, industrial cable, transformers, industrial inputs, electric equipments additional tax of 14.5 percent would be levied as against existing 5% taxesThe manufacturing units have also been hit by the increase of 14.5% additional tax on the purchase of sand for any construction work as against the existing 5 percent tax. Similarly the additional tax of 14.5% would be imposed in all the cosmetic items including perfumes, cosmetics, hair oil as against the existing 5% tax


2. BiharThe government would levy 14.5 percent additional tax on the purchase of mosquito repellent. Similarly the same 14.5 % tax would be levied on the purchase of (polyurethane) foam.Surcharge on goods mentioned in Schedule IV (Liquor, gas and tobacco) increased from 20% to 30%Residual rate of 13.5% is increased to 14.50%

Payment of Tax, Assessment and AppealsIf refund is not made upto 60 days then, department will pay interest. This limit earlier was 90 days


3. OrissaNo change


4. Last stop - Jharkhand


4 JharkhandThresholdsAudit threshold has been enhanced from Rs.40 Lakhs to Rs.60 LakhsInput Tax CreditInput tax credit on purchases made for sales in the course of inter-state trade or commerce is available to the extent of CST liability on such salesITC on purchases made for branch transfer of goods to other state will be allowed for tax paid in excess of 5%


5. NagalandProcedural CompliancesCompulsory filing of e-return w.e.f. 01.04.2016 Nagaland Government has provided for mandatory e-filing of VAT return through 'Tax Soft' for all the registered dealers i.e. only e-returns will be accepted w.e.f. 01.04.2016. This Notification has been issued to make the system online, efficient & more effective, thereby reducing paper work & cost of managing the same.


Common points on which state have made changesLooking to the concept of 26 AS, GST will have the same concept for ITC availment. Hence, few states have changed ITC eligibility from charge to paidTo clear the back log, very many states have introduced Amnesty schemeLooking forward to GST, very many states have started computerizing their proceduresFootprints of Swatch Bharat Mission can be seen by reduction in tax on cleaning materials in some stateStates are becoming user friendly and coming up with the concept of Ease of business


Common points on which state have made changesDepartments are in mood to appraise regular and diligent tax payers hence, some states have introduced schemes to appreciate regular tax payersSeeking guidance from the Union Budget, most states have adopted the path to simplify tax, remove anomaly and provided explanations and clarifications at many placesLarge number of states have exempted very many commodities, it is something opposite from the GST principalOnline is the new platform adopted by very many states


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Exhaustive Literature, Dedicated Faculty and a seminar unseen so far in my career.Chairman: Mr. Neerav ParmarBAI, Mumbai CenterMost Complicated subject handled very well within the time schedule, One of the best Seminars in recent years.GM -Indirect Taxes: Mr. P Veera ReddyKirby Building Systems India Ltd.Session aptly covered our requirementsSr. G M: Ms. Shilpa ThackerGodrej & BoyceCourse content well designed & structured & time lines were stuck to which is very impressive.G M ( F & A ): Mrs. H K JoshiONGC

TestimonialsThe programme is an excellent one.Head Admin: Mr. V S RajuLarsen & Toubro Ltd.


TestimonialsConsolidated list of control points in terms of client & PMProject Executive: Mr. Terence SeqiAsian Paints Ltd.Faculty was ExcellentMr. K R Sanjana: Sr. V P (F & A)Shapoorji Pallonji & Co. Ltd.Good Programme very happy to attend this programme. A lot of new thing to know by attending this workshopProject manager: Mr. Mayur patelDeegee Software Private LimitedReally Knowledgeable & beneficial for ConstructionSr. Engineer: Mr. Brahmprakash YadavCorrtech International


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Multi State Vat Budget Changes-2016-17

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Transcript of Multi State Vat Budget Changes-2016-17