Rajasthan State Budget 2008-09 : An Overview

Indirect Taxes

The Hon’ble Chief Minister Mrs. Vasundhara Raje presented the state budget for the Year 2008-09 on 25th Feb, 2008. As per expectations the budget was a very balanced one. It contains a lot of developmental and promotional schemes for all parts of the society. Though there was not much of the interest of the industry. Being professionals we should be aware of the financial activities around us.

A. Proposals related to the RVAT

Some proposals were included in the budget as “SIMPLIFICATION OF VAT”.

These are discussed in short hereunder:—

1. The most important proposal is regarding the abolishment of the existing 67 Check-Posts situated at the inter-State borders. This step was taken to provide free flow of goods and relief to trade and industry from harassments they face at these check points. The Check-Posts will be abolished from May 1st 2008. Presently only the notified goods are liable to be accompanied with the Forms during movement of goods. With abolition of Check-Posts, all the Taxable Goods coming in to or moving out of the State would be required to be accompanied with Form VAT-47/Form-49 respectively.

2. Schedules appended to the Act are also amended and the following table may help in summarizing the changes:—

Sr. No.	Name of the goods	Remarks
1	Fresh vegetables and fruits	Taxable at 4% when sold by Companies registered under the Companies Act, 1956.
2	Pappad Khar	New Exemption
3	Kangani	New Exemption
4	Country liquor, IMFL and Beer	Taxable at 12.5% when sold in Bar or Restaurant or Hotel
5	Gobar gas plants including its components  including machinery used in gobar gas plant;  i.e., (i) Gobar gas holder (ii) Guide frame for gobar gas holder and (iii) Gobar gas burner	New Exemption
6	Non Electrically operated hand tools; i.e., gurmala  karni sawa, gunia, randa, basula, iron chinni, firma for repair of shoes, hair cutting machine, coal base iron-press and iron-wire brush	New Exemption
7	Wooden hand blocks for textile printing	New Exemption
8	ISI marked kerosene stove and wick stove	New Exemption
9	Domestic solar cooker	New Exemption

 

Sr. No.	Category of Dealers	Remarks
1	Regd. Dealers of marble who have not included royalty amount in the sale price during the period 1-4-2006 to 14-1-2008	Retrospective exemption on the tax amount related to royalty amount.
2	Dealers selling food under the Akshay Kalewa Scheme	New Exemption

Sr. No.	Name of the goods	Existing Rate of Tax	After Budget  Rate of Tax	Remarks
1	Exclusively moulded plastic footwear,  Hawaii chappals and straps thereof exclusively moulded plastic footwear  instead of (Modified Entry) ……	12.50%	4%	4% tax rate  limited to
2	Fresh vegetables and fruits when sold  by a company registered under the  Companies Act, 1956	Exempted inserted	4%	New Entry
3	ACSR Conductors	12.50%	4%	New Entry
4	Cots made of iron pipes and niwar	12.50%	4%	New Entry
5	All kinds of marble	12.50%	4%	New Entry
6	Finished Kota stone	12.50%	4%	New Entry

3. Assessment provisions are also amended in this budget. Proviso to section 23 is inserted which states that now an assessee may opt for annual assessment from the Assessment Year 2008-09. This is in addition to the option presently available for annual assessment. In this regard sub-section (5) to section 24 is also inserted to the RVAT Act empowering State Government to notify for annual assessment for any year and Commissioner can extend limitation for assessment for a maximum period of six months in appropriate cases.

4. One major change is made which is of utmost import for the professionals and that is related to the VAT Audit under section 73 of the RVAT Act. Section 73 of the RVAT Act is amended and this amendment means that now the Audit under the Act will not be compulsory for the dealers who have either filed their quarterly returns electronically or have provided the quarterly returns in soft copy to the department. These dealers are kept out of the purview of the VAT Audit along with section 3(2) and section 5 dealers.

5. New section 97A inserted to ensure that in case of retrospective exemption or reduction in tax rates, the tax charged or collected shall be deposited and tax already deposited shall not be refunded and ITC claimed, if any, shall be reversed.

6. To the extent of outstanding amount as per Eligibility Certificate issued, facility of deferment of tax granted to the Sick units, which after its revival, commences commercial production on or before 31-3-2009.

7. New Composition Scheme is declared for the dealers dealing in the business of Silk Fabrics. This is related to the Tax liability related to the Year 2006-07 and 2007-08. The composition amount is 0.5% of the gross turnover.

8. Another important amendment is made in Rule 18(2) of the RAVAT Rules. The Input Tax Credit Available on purchases of Capital Goods would be allowed to be claimed in two half yearly equal installments in the month of September and March.

9. Rule 19(1) is also amended and the result of the amendment is that now if any assessee files the returns electronically or submits the returns in soft copy to the department and shows his intention to file the monthly return than he may file the monthly return within 20 days from the end of the month.

10. There is no need of filling of Form VAT-09 with the quarterly returns since this particular Form is deleted.

11. The Proforma of Form VAT-07 is also amended. Now it is mandatory to disclose the description of the goods and the schedule No. along with S. No. of the goods, under point Nos. 5A & 5B respectively.

12. The Proforma of Form VAT-08 is also amended and practically the details of Form VAT-09 have incorporated in Part I of the Form VAT-08 itself. Newly inserted Part-I requires the information related to the sale of goods to the dealers other than the dealers registered under section 3(2) or section 5 or section 8(3) of the RVAT Act, 2003.

13. The time limit of the Rajasthan Investment Promotion Scheme (RIPS) is extended up to 31-3-2011.

B. Proposals related to the Entertainment Tax Act

1. The rate of Entertain Tax has been reduced to 30% from 35%, on the payment, which has been received for admission to an Entertainment.

2. The Direct To Home (satellite TV) broadcasting services are also under the purview of the Entertainment Tax.

C. Health and Environment Cess

Health and Environment Cess is introduced in this budget. This cess will be levied on notified Minerals. This should not be more than Rs. 500 per tonne of mineral dispatched.