Figures of institution, Disposal and Pendency of Appeals as on 1-4-2017

Bench No. of Benc. No Mem. Institution Disposal Pendency SMC Pendency
Mumbai 12 22 951 788 18441 1619
Pune 2 03 300 269 6058 395
Nagpur 1 71 56 969 26
Raipur 18 0 966 154
Panaji 1 01 46 132 208 22
Delhi 9 10 863 518 20949 938
Agra 1 02 35 17 977 167
Bilaspur
Lucknow 2 01 65 13 735 116
Allahabad 1 28 38 676 89
Jabalpur 1 11 5 629 72
Kolkatta 5 09 238 341 5432 431
Patna 1 35 0 550 95
Cuttack 1 58 37 1289 76
Guwahati 1 20 29 474 104
Ranchi (Jharkhand) Circuit Bench 1 23 38 608 192
Chennai 4 09 314 380 3298 130
Bangalore 3 06 276 279 4446 207
Cochin 1 01 101 66 677 26
Ahmedabad 4 09 363 376 12219 6872
Indore 1 2 120 138 1644 120
Rajkot 1 29 86 1782 474
Hyderabad 2 04 269 127 3078 558
Vishakhapatnam 1 2 77 77 1169 256
Chandigarh 2 04 208 100 1902 183
Amritsar 1 02 67 82 1071 145
Jaipur 2 03 88 157 1368 351
Jodhpur 1 02 65 50 773 26
Total 126 102 4739 4199 92388 13844

Valid from: 1st January, 2017 to 30th June 2017

Launch of Employees’ Enrolment Campaign – 2017

Employees Provident Fund Organization (EPFO) has launched Employees’
Enrolmet Campaign – 2017 from the 1st day of January, 2017 till the 30th Day of June, 2017
to provide opportunity to all the employers covered or uncovered under EPF & MP Act, 1952 to voluntarily come forward and declare the details of all such olive employees, who were required or entitled to become member of EPF on or after the
1st day of April, 2009, but before the 1st day of January, 2017 and who could not be enrolled as member for any reasons. This campaign is currently available for Indian Nationals only. This benefit is not available to the employers of the establishments against whom, Inquiries u/s. 7A of the Act or paragraph 26B of the Act is going on.

The employer has to voluntarily make the declaration between
1st day of January, 2017 till the 30th day of June, 2017 in the prescribed “Declaration form for Employees’ Enrolment Campaign, 2017” available on website www.epfindia.com for which the following incentives will be provided to him:

a) The employee’s share of contribution, if declared by the employer as not deducted, shall stand waived.

b) The damages to be paid by the employer in respect of the employees for whom declaration has been made under this campaign shall be at the rate of ₹ 1 (₹ One) Per Annum, however only simple interest @ 12% per annum has to be paid.

c) No Administrative charges for EPF Scheme, 1952 and EDLI Scheme, 1976 shall be collected from the employer in respect of the contribution made under the declaration.

d) The declaration made during the campaign shall be treated as bona fide, unless proved otherwise and no inspection for verification will be contemplated.

Further, once declaration is made the employer has to remit the dues within 15 days from the date of declaration, failing which the declaration made under this campaign will be deemed to have not been made. After the completion of the process the employee will be getting all eligible benefits based on the contributions.

TENTATIVE BENEFIT COMPARISON CHART

In the existing system In the Enrolment campaign
Year Dues (Both employee and employer share) Interest (7Q) Damages (14B) Admin (Charges 1.1%) Total Dues only employees share (If not deducted employer share) Interest (7Q) Damages (14B) Admin Charges Total
2009 100 96 100 1.1 297.10 50 48 * 0 98
2010 100 84 100 1.1 285.10 50 42 * 0 92
2011 100 72 100 1.1 273.10 50 36 * 0 86
2012 100 60 100 1.1 261.10 50 30 * 0 80
2013 100 48 100 1.1 249.10 50 24 * 0 74
2014 100 36 75 1.1 212.10 50 18 * 0 68
2015 100 24 50 0.85 174.85 50 12 * 0 62
2016 100 12 25 0.85 137.85 50 6 * 0 56

*Damages is levied as one rupee per annum

Declaration Form for Employees’ Enrolment Campaign, 2017

Return about the employees who were required or entitled to become members of the Fund for the period beginning the 1st day of April, 2009 and ending the 31st day of December, 2016 but were not enrolled as members for any reason.

Name & Address of Factory/ Establishment ___________________________________

Code no of Factory/ Establishment

Sr. No. Account No. UAN Name of the Employee Father’s Name (Or Husband’s name in case of married women) Date of Birth Sex Date of Eligibility for membership under EPF
Scheme, 1952
Remarks (Previous Account No. & particulars of previous service, if any)
1 2 3 4 5 6 7 8 9

I hereby declare that the above-mentioned employees are alive on the date of making this declaration and they were required and entitled to become members of the fund from the dates indicated against their names but could not be enrolled as members. I further declare that Form 11 from each of the above- mentioned employees has been obtained duly signed or with thumb impression by the employee.

I hereby undertake that if the employee’s contribution for any month has been deducted from the wages of any of the above-mentioned employees, the same shall also be deposited by me along with interest thereon in accordance with the provisions of Employees’ Enrolment Campaign, 2017.

I also undertake to remit the contributions. Interest and damages payable in respect of the abovementioned employees in accordance with the Employees’ Enrolment Campaign, 2017.

Signature of the Employer or other Authorised

Official of the Factory/Establishment

Dated………………………..2017

FAQs on EPFO Amnesty Scheme

1) What is Employees’ Enrolment Campaign, 2017? This is a campaign to provide opportunity to the employers to voluntarily come forward and declare details of all such employees who were entitled for PF membership between 1-4-2009 and
31-12-2016 but could not be enrolled for any reason. The Campaign aims to extend PF benefits to employees hitherto deprived of PF benefits.
2) Who can be declared a member by the employer? Under the Campaign only such an employee can be declared for membership –

i) Who is alive and

ii) Who furnished Form 11 to the employer and

iii) Who was required or entitled to become member of Employees’ Provident Fund on or after the 1st day of April, 2009 but before the 1st day of January, 2017 but could not be enrolled as member for any reason.

3) Whether International Workers can be declared under the Campaign? No. The incentives are available for enrolment of Indian Nationals only.
4) What incentives are available to the employer? The following incentives are available to the employer:

i) The employee’s share of contribution if declared by the employer as not deducted shall stand waived.

ii) The damages to be paid by the employer in respect of the employees for whom declaration has been made under this campaign shall be at the rate of
₹ 1 (one) per annum.

iii) No administrative charges shall be collected from the employer in respect of the contribution made under the declaration.

5) Whether any inspection shall be done to confirm the genuineness of the declaration? The declaration shall be treated bona fide unless proved otherwise and no inspection for verification is contemplated.
6) Whether an employer against whom a complaint has been made by the employees is also eligible for making declaration? Yes. However, the declaration shall be valid only in respect of employees who are alive and any only if no, proceedings under Section 7A of the Act or under paragraph 26B of the Employees’ Provident Funds Scheme, 1952 or under paragraph 8 of the Employees’ Pension Scheme, 1995 have been initiated against their establishment / employer to determine the eligibility for membership of such employees.
7) What is the time limit for making the declaration? The declaration should be made between 1-1-2017 and
30-6-2017.
8) Who can make a declaration? Any employer, whether already covered or yet to be covered, can make a declaration.
9) Can an employer be forced to make a declaration? No. The declarations are on voluntary basis.
10) What is the time limit to for making the remittances onces a declaration has been made? The time limit for making the remittances once a declaration has been made is 15 days from the date of declaration.
11) What happens to the declaration if after making declaration the employer does not make remittance? If the employer fails to pay within 15 days of the date of making the declaration, the dues, interest and damages payable by him in respect of the declaration made under this campaign, such declaration shall be deemed to have not been made under this Campaign.
12) Whether damages will be levied later on the amount remitted? No. Damages at the rate of ₹ 1 (one) per annum are to be remitted upfront while remitting contribution and interest.
13) Whether interest payable is to be paid at compound interest rate or simple interest rate? Only simple interest is to be paid at the rate of 12 per cent per annum.
14) Whether any administration charges are payable for EPF Scheme, 1952 or EDLI Scheme, 1976? No.
15) Is there any restriction on the number of declarations that can be filed by an employer? No. There is no restriction on the number of declarations that can be filed by an employer.
16) Is there any restriction on the number of employees that can be enrolled under a single declaration? No. There is no restriction on the number of employees that can be enrolled under a single declaration.
17) Whether online facility is available for making the declaration? Yes. Facility for making the declaration online is available. However, documentary declaration can also be filed with the concerned RO/SRO.
18) How is the amount of contribution, interest and damages to be paid after making the declaration? Contribution is to be remitted as a supplementary ECRs for every month of the past period enrolment till December, 2016. Simple interest at the rate of 12% per annum and damages at the rate of Rupee one per annum are also to be paid through a separate ECR.
19) Whether it is necessary for the employer to take Form 11 from all the employees? Yes. Duly filled in Form 11 should be obtained by the employer from all the employees being declared under the Campaign. A declaration to this effect is included in the Declaration Form to be signed by the employer. The declaration given in the Declaration Form may be accepted if it is duty filled in and signed by the employer.
20) An employee working with the establishment has left and is not traceable? Whether such an employee can be enrolled under the declaration? No. An employee can be declared under the Campaign only if he is alive on the date of making the declaration and Form 11 duly filled with signature or thumb impression of the employee has been obtained. Therefore, an employee who is not traceable cannot be declared under the Campaign.
21) Whether such persons who were to be enrolled as member but died before 31-12-2016 can be enrolled as members under the Campaign? No. An employee can be declared under the Campaign only if he is alive on the date of making the declaration.
22) Whether an RPFC can deny the declaration saying that they have now decided to initiate inquiry under section 7A of EPF & MP Act, 1952 even though there was no such inquiry pending against the employer as on 31-12-2016? Declaration made prior to initiation of inquiry under section 7A shall be legally valid and cannot be denied by the RPFC. Once a notice under section 7A of the Act is issued, declaration cannot be made.
23) For the purpose of Employees’ Enrolment Campaign, 2017 when is an inquiry under section 7A of the Act treated as initiated? For the purpose of Employees’ Enrolment Campaign, 2017 an inquiry under section 7A of the Act shall be treated to be initiated on service of notice of the inquiry under section 7A to the employer or his representative or at the office of the employer.
24) An inquiry under section 7A of the Act has been initiated against the employer for the period from April, 2011 to March, 2014. Can such an employer make a declaration under the campaign? A declaration can be made under the Campaign for the period for which no inquiry under section 7A has been initiated. Therefore, the employer can make a declaration for employees whose date of joining (the date on which the employee was entitled and required to become members of the fund) is either between 1-4-2009 and
31-3-2011 or between 1-4-2014 and 31-12-2016. For instance, if the employer declares one employee,
Mr. ‘A’ to have joined on 1-4-2010, the employer will get the benefits under the Campaign viz.

i) Waiver of employee’s share,

ii) Damages at the rate of Rupee one per year and

iii) No administrative charges,

In respect of Mr. ‘A’ only for the period for which the inquiry has not been initiated, i.e. for 1-4-2010 to 31-3-2011 and for 1-4-2014 to 31-12-2016.

25) The establishment is having 7A inquiry going on in respect of hundred and ten employees. Whether the remaining employees, for whom No. 7A proceeding is being conducted, can be declared and enrolled under the Campaign? Yes.
26) Whether interest of employees has been protected under the Campaign? Yes. The employees will be getting all eligible benefits based on the contributions.

Penalty – in case of excess payment

Query

A dealer has filed returns showing set-off of ₹ 1,00,000. However, in assessment set-off is reduced to ₹ 10,000, by disallowing set-off of ₹ 90,000 on ground of non-genuine purchases. However, in spite of reduction there is excess and refundable amount of ₹ 20,000 as shown in assessment order. The assessing authority is proposing penalty for concealment u/s. 29(3) of MVAT Act. Whether penalty is justified in such facts of the case?

Reply: Penalty under fiscal laws, like MVAT Act is not automatic but discretionary. Section 29(3) of MVAT Act reads as under:

“29. Imposition of penalty in certain instances

(3) While [or after passing any order] under this Act, in respect of any person or dealer, the Commissioner, on noticing or being brought to his notice, that such person or dealer has concealed the particulars or has knowingly furnished inaccurate particulars of any transaction liable to tax or has concealed or has knowingly mis-classified any transaction liable to tax or has knowingly claimed set-off in excess of what is due to him, the Commissioner may, after giving the person or dealer a reasonable opportunity of being heard, by order in writing, impose upon him, in addition to any tax due from him, a penalty [not exceeding the amount of tax due but not less than twenty five per cent] of the amount of tax found due as a result of any of the aforesaid acts of commission or omission.”

Therefore, there is authority to levy penalty from NIL to 100% of tax dues.

In my opinion, no penalty is attracted in given facts. There are no dues in assessment order as there is refund. Therefore no penalty can be quantified.

The position is also well settled by judgment of Hon. Gujarat High Court in case of
State of Gujarat v. Jay Steel and Tubes Traders (2015) 80 VST 530 (Guj.). Hon. Gujarat High Court has held that when on facts it is found that there is excess availability of input-tax credit as against the assessed additional tax, there was no intention on part of the assessee to avoid payment of taxes. Hence, there can be no imposition of penalty also. The above judgment is reaffirmed by the Hon’ble Gujarata High Court in the
State of Guajarat v. Kin Tech Synergy Pvt. Ltd. (2015) 81 VST 91 (Guj.).

Otherwise also there cannot be concealment to evade tax. There is refund therefore Government is not out of pocket. The disallowance of set-off is due to development subsequent to purchases. Reference can also be made to very land mark judgment of Hon. Supreme Court in case of
Hindustan Steel Ltd. (25 STC 211)(SC), in which Hon. Supreme Court has observed as under about levy of penalty.

“Under the Act penalty may be imposed for failure to register as a dealer: section 9(1) r/w section 25(1)(a) of the Act. But the liability to pay penalty does not arise merely upon proof of default in registering as a dealer. An order imposing penalty for failure to carry out a statutory obligation is the result of a quasi-criminal proceeding, and penalty will not ordinarily be imposed unless the party obliged either acted deliberately in defiance of law or was guilty of conduct contumacious or dishonest, or acted in conscious disregard of its obligation. Penalty will not also be imposed merely because it is lawful to do so. Whether penalty should be imposed for failure to perform a statutory obligation is a matter of discretion of the authority to be exercised judicially and on a consideration of all the relevant circumstances. Even if a minimum penalty is prescribed, the authority competent to impose the penalty will be justified in refusing to impose penalty, when there is a technical or venial breach of the provisions of the Act or where the breach flows from a bona fide belief that the offender is not liable to the Act in the manner prescribed by the statute. Those in charge of the affairs of the company in failing to register the company as a dealer acted in the honest and genuine belief that the company was not a dealer. Granting that they erred, no case for imposing penalty was made out.”

Looking to all above aspects no penalty can be justified on given facts.

Issue of Form H

Query

A dealer (A) has export order, therefore it is intended to purchase for its supplier (B) against Form ‘H’. The supplier wants to purchase said goods from his supplier (C) and wants to issue him Form ‘H’. Whether it will be as per law?

Reply: The issue of ‘H’ form is governed by section 5(3) of CST Act. Section 5(3) reads as under:

“S. 5. When is a sale or purchase of goods said to take place in the course of import or export.

(3) Notwithstanding anything contained in sub-section (1), the last sale or purchase of any goods preceding the sale or purchase occasioning the export of those goods out of the territory of India shall also be deemed to be in the course of such export, if such last sale or purchase took place after, and was for the purpose of complying with, the agreement or order for or in relation to such export.”

Thus, it is a facility given by law makers to effect one prior transaction before export against ‘H’ form, so that the export purchase dealer will not be liable to pay tax and therein to claim refund. Such prior transaction will be considered as export sale. From language of section 5(3), it is clear that it covered the very one transaction prior to export. Therefore such Form ‘H’ facility cannot be extended further. In given case, B cannot issue ‘H’ form to C. Only A can issue ‘H’ form to B.

 
The world is the great gymnasium where we come to make ourselves strong.

– Swami Vivekananda

Query No. 1

The vacant plot was purchased five years back, which is sold at ₹ 60,00,000/-, but Stamp Duty value is ₹ 1,30,00,000/- what assessee should do?

Answer

Section 50C provides that where consideration received or accruing as a result of the transfer of land or building or both, is less than the value adopted or assessed by any authority of a State Government for the purpose of stamp duty in respect of such transfer, the value so adopted or assessed shall be deemed to be the full value of the consideration, and the capital gains shall be computed accordingly under section 48 of the Act.

It further provides that where the assessee claims that the value adopted or assessed for stamp duty purposes exceeds the fair value of the property as on the date of transfer, he may dispute the value so adopted or assessed in any appeal or revision or reference before any authority or court. If he has not disputed before any authority or court, he may request the Assessing Officer to refer the matter to a Valuation Officer in accordance with section 55A of the Act.

If fair value determined by the Valuation Officer is less than the value adopted for Stamp Duty purposes, the Assessing Officer may take such fair market value to be the full value of consideration. However, if the fair market value determined by the Valuation Officer is more than the value adopted or assessed for the Stamp Duty purposes, the Assessing Officer shall not adopt such fair market value and shall take the full value of consideration to be value adopted or assessed for Stamp Duty purposes.

Query No. 2

Whether the Assessing Officer is justified in making addition of difference between Stamp Duty value and purchase price of agricultural land under section 56(2)(vii) of the Act?

Answer

This section is opposite of section 50C of the Act. Section 50C is applicable to seller of land or building or both, while this section is applicable to the purchaser of land or building or both.

As per the querist, he has purchased agricultural land which is not a capital asset as per section 2(14)(iii) of the Act. Hence, there is no question of making addition in respect of difference between Stamp Duty value and purchase price, though section covers land or building or both.

Query No. 3

Whether Assessing Officer is justified in treating excess stock found as undisclosed investment under section 69 of the Act?

Answer

Yes, as per the Bombay High Court in Ramanlal Kacharulal Tejmal [146 ITR 368] excess stock found represents investment of the assessee in property and therefore same can be assessed under section 69 of the Act.

Similar view has been taken by the Gujarat High Court in Fakir Mohmed Haji Hasan v. CIT [246 ITR 290]
and Punjab & Haryana High Court in B. T. Steel Ltd. v. CIT [328 ITR 471].

Query No. 4

Whether self acquired property of father or grandfather after coming into force Hindu Succession Act be treated as Joint Hindu Family?

Answer

In view of the Hindu Succession Act, 1956, the separate property of the father inherited upon intestacy by the son is to treated as son’s separate property and not as the property of his joint family.

The property of a Hindu dying intestate after the coming into force of the Hindu Succession Act, 1956, will devolve on his heirs in accordance with section 7 of the Hindu Succession Act and the successor will inherit the property in their individual capacity and not as representing their own Hindu Undivided Family. The Supreme Court, in
CWT v. Chander Sen, [161 ITR 370 (SC)] has held that if there is no coparcenary subsisting between a Hindu and his sons at the time of death of his father, property received by him on his father’s death cannot be blended with the property which had been allotted to his sons on a partition effected prior to the death of the father.

In Chander Sen’s case (supra), the Supreme Court had approved the view taken by the Madras High Court in
Addl. CIT v. Karuppan Chettiar [114 ITR 523]. This principle was also followed in
State of Tamil Nadu v. Ganesa Odayar [227 ITR 544 (Mad.)(FB)].

Query No. 5

Whether cash aggregating to rupees two lakh or more can be received by a bank after insertion of Section 269ST under the Income-tax Act?

Answer

Yes. Section 269ST reads as under:

“No person shall receive an amount of two lakh rupees or more –

(a) In aggregate from a person in a day; or

(b) In respect of a single transaction; or

(c) In respect of transactions relating to one event or occasion from a person,

otherwise than by an account payee cheque or an account payee bank draft or use of electronic clearing system through a bank account:

Provided that the provisions of this section shall not apply to–

(i) Any receipt by–

(a) Government;

(b) Any banking company, post office savings bank or co-operative bank;

(ii) Transactions of the nature referred to in section 269SS;

(iii) Such other persons or class of persons or receipts, which the Central Government may, by notification in the Official Gazette, specify.

Explanation.– For the purposes of this section,–

(a) “Banking company” shall have the same meaning as assigned to it in clause (i) of the Explanation to section 269SS;

(b) “Co-operative bank” shall have the same meaning as assigned to it in clause (ii) of the Explanation to section 269SS.”

So, a person can deposit / make payment otherwise than by account payee cheque or an account payee bank draft or use of electronic clearing system through a bank account to any Government, Banking Company, Post office Saving Bank or co-operative bank.

Note: Please send your queries relating to Direct, Indirect & International Taxation, Accounting & Auditing Standards and Company Law, FEMA etc., to AIFTP, having interest to the Members.

With elections around the corner, the State Government, while presenting its vote-on-account in the Assembly, introduced no new taxes and proposed a 17 per cent increase in plan outlay, at ₹ 57,905 crore, for financial year 2017. The interim financial statement projects ₹ 8 crore deficit for 2016-17.

Finance Minister Mr. Amit Mitra, with an eye on the Assembly elections, enlisted the Government’s “unprecedented” allocation in the social sector, while pointing out that the debt-ridden State has received no help from the Centre in terms of debt morantorium.

“This budget proposes no new tax and announcement of no new scheme, this year being an election year. This is allocation for the full year and vote-on-accounts for four months on the expenditure the Government will incur till new Government is in place,” Finance Minister said. He added that the State, on the Gross Value Added count, has expanded at 12 per cent against national growth of 7.3 per cent.

I would like to highlight the changes in Finance Act, 2017

1. Reduction in Stamp Duty on registration of under construction property

In case of registration of agreement relating to sale or assignment or lease cum sale for flats or apartments or units which are under construction or to be constructed, stamp duty shall be charged at the rate of 2% of the market value of the property subject to following conditions.

a. Plan of the flats or apartments or units has been sanctioned within a period from 1-1-2015 to the date of effect of this notification and

b. Final Conveyance shall be completed within 31st January, 2019.

2. There are some changes in rate of stamp duty on transactions like proprietary accounts, currency, interest, debt security and bonds.

3. The Jurisdiction of the West Bengal Taxation Tribunal has been extended to The West Bengal Tax on Entry of Goods into Local Areas Act, 2012, from 1st April, 2017.

4. The date for issue of provisional certificate of settlement to the applicant in prescribed form extended from 7 working days to 15 working days from the date of receipt of application for settlement of disputed taxes in Form 2.

5. Entry tax is not applicable in case of a dealer who’s turnover is less than ₹ 5 lakhs in a return period subject to a maximum of ₹ 20 lakhs in a year.

6. West Bengal Tax on Entry of Goods into Local Areas Act, 2012 has been validated, as such any assessment order, provisional order, collection of tax, interest, late fees will be deemed to be and to have always been done or taken in accordance with law.

7. In line with GST, the earlier limit for liability to pay tax on transfer of property in goods involved in execution of
works contract under section 14 of WBVAT Act, increased from ₹ 10 lakhs to ₹ 20 lakhs.

8. Rate of VAT in case of dealer following/opted to pay at compound rate of tax increased from 1% to 3% under sections 16 and 18 of the West Bengal Value Added Tax Act, 2003.

9. The requirement for submission of VAT Audit report in Form 88 by a Private Limited Company or a Public Limited Company or any other dealer who’s turnover including stock transfer to branches exceeds ₹ 10 lakhs has been dispensed with and

10. Every registered dealer who is required to get his accounts audited under section 44AB of the Income-tax Act, 1961 shall within 31st December submit a copy of Audit report as required under Income-tax Act, 1961 along with a copy of Profit and Loss Account and Balance Sheet for such year.

11. The followings goods has been included in Schedule A, accordingly no tax is payable on sale of such goods.

a. Biodiesel excluding ethanol

b. Biomass Briquettes (earlier taxable @ 5%)

c. Hair bands and Hair Clips (earlier taxable @ 5%)

d. Kerosene Stove (earlier taxable @ 5%)

e. Leaf plates and Cups (earlier taxable @ 5%)

f. Solar water heater

g. Teracotta tiles

12. Machineries for generation of electricity from waste has been included in Schedule C and will be charged to tax @ 5%.

Knowledge can only be got in one way, the way of experience; there is no other way to know.

– Swami Vivekananda

The Hon’ble Finance Minister presented the budget speech for the year 2017-18 on 3rd March 2017, in the Legislative Assembly. FM did not welcome demonetisation and remarked that it has shattered lives of common man. No new tax proposals recommended by FM in the wake of the new legislation GST.

FM appreciated the seamless input tax credit of tax paid in earlier stages will be allowed from the point of manufacture to the point of consumption. He also welcomed removal of barriers on inter State transactions. He also appreciated that the concept of GST will totally eliminate the ‘tax on tax’. It will reduce the tax burden on all goods. The tax administration will be smooth and efficient.

FM has also informed the legislature that the software and servers are ready to switch over to GSTN. It is his wish that the centre would fully compensate the States for five years.

FM could not make the Centre decide on all matters. The most important was the rejection of the demand that State should have a higher share of the GST rate than Centre. It was also demanded that concessions should also be granted for co-operative sector as in the case of agriculture. This was not positively considered by the centre. Subsuming of lottery tax in GST in the Constitutional amendment itself is a set back. It was demanded that the tax rate on luxury goods should be higher than that of Central rate. Centre shall also fund the compensation from its own revenues rather than levying cess. This was also not accepted.

There would be four rates, viz., 5%, 12%, 18% and 28% in GST. The tax rate of each goods is yet to be decided. The general guideline to be followed in fitment will be to place the item to the nearest percentage of the combined excise and VAT tax inclusive.

It is considered that GST will be advantageous to Kerala. First, GST is a destination based tax. The credits of tax deposited earlier would accrue to the place of last sale. Hence, it would be beneficial to a consumer State like Kerala. Such States will be eligible to get tax on goods coming into Kerala through e-Commerce. Henceforth, States will be eligible to get the tax (IGST) on such inter State transactions. Service sector is prominent in Kerala. Sixty-five per cent of the State revenue is from service sector. Henceforth, State will be able to get the right share on service tax also.

VAT Amnesty Scheme

Before the implementation of GST, the thrust of the department would be in completing the assessments and re-assessments relating to VAT. As in KGST, FM intends to launch an extensive amnesty scheme for redressing the disputes by granting the relief from excessive penalties and interest. Levying penalty has become automatic. Concept of contumacious conduct in levying penalty is given a go by these days. This concept is totally opposed to the principles of natural justice.

The following amnesty scheme is proposed to be implemented in the Kerala Value Added Tax Act.

1) In the case of VAT dealers, if the tax arrears of the assessment years from 2005-06 to 2010-11 is completely remitted, the interest thereon and 70% of the penalty amount and interest on penalty, shall stand waived.

2) All arrears pertaining to any year shall be settled together.

3) An assessee opting to settle arrears under this scheme shall withdraw all cases, revision and appeals pending before any forums.

4) Tax arrears and interest shall be calculated as on the date of submission of application.

5) Arrears under CST Act for the above period can also be settled under this Scheme.

6) The last date for filing option under this scheme shall be 30th June, 2017. Amount reckoned under the scheme shall be paid by equal instalments on or before 31st December, 2017.

Department will issue the forms for amnesty scheme so that dealers can avail the same in the case of omissions or commissions. Many of the assessments are made by making frivolous additions by comparing the annual returns, mismatch shown in the system between annual return and purchase data uploaded. Many of the dealers assessments are done without examination/verification of the books of the dealer. The author is of opinion that the scheme is not welcome in the case of genuine dealers.

Presumptive Tax Dealers

In 2016-17 budget, an amnesty scheme was declared for presumptive tax dealers in VAT Act. Considering the request from various trade organisations, it has been decided to simplify the provisions of the scheme. To settle the cases as per the scheme, total turnover will be calculated adding 5% gross profit on unaccounted purchases along with the sales turnover declared as per return. If the total turnover calculated for a year by adding 5% gross profit on unaccounted purchase is below the threshold limit as per section 6(5), then such dealer shall pay tax at the rate of half per cent. If the turnover thus calculated is above the threshold limit as per section 6(5) and up to rupees one crore, then the dealer shall pay tax at the rate of 1% for the turnover above the threshold limit. And if the turnover is above rupees one crore, the dealer shall pay tax at the rate of 2% for the turnover above rupees one crore and 1% for the turnover in between threshold limit and up to rupees one crore. In general, 0.5% shall be paid for the turnover up to threshold limit. Option to settle under the scheme shall be submitted before the assessing authority on or before 30th June, 2017. The assessing authority shall intimate the applicant, the amount to be paid as per the scheme within 15 days from the date of receipt of the option. The applicant shall pay 30% of the amount within 15 days from the date of intimation and balance amount on or before 31st December, 2017. The dealer shall opt for this scheme for all those years for which he has unaccounted purchases. Assessment and revenue recovery steps will be intensified for those who have not opted under this scheme. No statutory reexamination or refund will be allowed in cases settled under this scheme. This scheme is also applicable for those dealers who have opted amnesty scheme for 2016-17 but had defaulted payments. There will be no other changes in the conditions prescribed under the amnesty scheme for 2016-17.

KGST Act

An amnesty scheme was declared in 2016-17 budget for the assessment done and demand generated up to 31-3-2016 in case of assessment years up to 2004-05. The time limit prescribed was 28th February, 2017. This is extended up to 31st December, 2017. Those dealers who have defaulted payment under the previous scheme shall settle the arrears by paying balance amount under the new scheme.

Agricultural Income Tax Act and Tax on Luxuries Act

If the tax arrears of the assessment years from 2005-06 to 2010-11 is remitted, the interest thereon and 70% of the penalty amount and interest on penalty, shall stand waived. Other conditions will be same as that of VAT amnesty.

Works Contract

There were certain disputes in determining the nature of works contract involved in the installation of kitchen cabinet works, aluminium fabrication works, air-conditioning plant installation. In these cases, the tax determined under compounding scheme was reassessed and taxed at scheduled rate. Interest and penalty were also imposed. As the Constitutional Bench of the Hon’ble Supreme Court has widened the scope of the definition of works contract, one time settlement scheme for such cases is declared. In cases where compounded tax was paid by the contractors for such contracts, they shall be exempted from paying tax at scheduled rate, provided all the purchases are from within the State and such contractors shall pay 2% tax for total contract amount over and above compounded tax already paid. This scheme will be applicable for the assessments up to the financial year 2014-15.

Concessions

The previous Government had exempted tax under VAT for natural rubber and its variants for the period from 20th December 2014 to 1st March 2015 by notification. But necessary provisions to this effect were not incorporated in the Finance Act. Hence, rubber dealers are liable to pay tax and interest for the above period. Considering the request from the trade sector to resolve the issue, it is announced that natural rubber and its variants is exempted from tax for the period from 20th December to 31st March 2015.

The tax rate for solar energy devices and spare parts is currently 1%. But 14.5% is levied for the installation of such devices, considering it as works contract. To encourage ‘Akshayorja Scheme’ the tax rate of such works will also be fixed at 1%. This will have retrospective effect from 1-4-2013 from the date on which the tax rate of solar energy devices was reduced to 1%. But, tax paid during this period based on the assessment done will not be refunded. Those dealers who opted to pay higher rate will be fools.

The Hon’ble Court has decided that packing materials used in exporting goods is liable to be taxed. The small medium scale units manufacturing these products did not levy tax due to ambiguity in VAT Act. Accordingly, such units have to bear heavy tax burden. The packing materials used in exporting goods will be exempted from tax, subject to conditions, for the period from 2005-06 up to the year on which the Division Bench of the Hon’ble High Court has rendered its judgment in such cases. Tax already paid during this period will not be refunded.

Simplification of Procedures

Considering the volume of appeals pending before the 1st Appellate Authority, the powers of revision against penalty orders were granted to the District Deputy Commissioners as per Finance Act 2014. The powers of second revision on these orders were with the Commissioner. Considering the enhancement of the post of Appellate authorities in 2016, it is decided to restore the position as it existed prior to 2014. The present revisions u/s. 57 pending with Deputy Commissioners and the present second revisions u/s. 59 pending with the Commissioner shall stand transferred to the first Appellate Authority and to the Tribunal respectively w.e.f. 1-4-2017.

FM wants to bring a special scheme for completing pending assessments and re-assessments in a time bound manner. Necessary amendment will be made in VAT Act empowering Government to issue guidelines for completing assessments in a fast-track mode. The time limit for assessments, including completion of assessments under sections 24, 25 of the KVAT Act shall be extended by another year. Necessary amendments will be made in the Act for this purpose. Such extensions are announced every year to cover the inefficiency of the department. It is high time, Courts interference in these matters will put an end to such unauthorised extensions. It will be a great relief to many of the genuine dealers.

Lottery

In the current year, there is an increase of 18% in the income from the sale of lotteries. If there was no cancellation of Kerala lottery draws due to the negative impact of demonetisation, the sale would have increased to 30%. With the implementation of GST, the tax laws on paper lottery will become inoperative. This is a serious issue. We have to explore the possibility of new legislation within the legislative jurisdiction of State Assembly. Government is seriously considering to enact a new law for imposing licence fee on the draws of paper lottery. Considering the urgent requirement for such a law, Government has decided to present a new bill for the purpose with the coming Finance Bill. Lottery culture Jai Ho!

Shri Manohar Parrikar is Back”¦.as Chief Minister and Finance Minister of Goa. Finance is a subject close to his heart. He is not only creative with the avenues he taps for raising revenue for the State but also excellent with numbers. However, after taking over as the Chief Minister of Goa he had barely a week to present his first State Budget of the new Government. Also with GST on the anvil there were no substantive amendments in the State Indirect tax laws viz. Goa VAT Act, Goa Luxury Tax Act, Goa Entry Tax Act, Goa Entertainment Tax Act.

With its huge domestic and international tourist inflow and the highest per capita income in India at ₹ 2,71,793/-, Goa is a consuming State, and therefore it is estimated that State Government coffers will see a significant jump after implementation of GST. Further services play a major role in the State economy and a share of the service tax pie in GST will boost revenues. To compliment this, taxation on liquor and petroleum products which is a major source of revenue for the Goa Government will continue to be within its purview. With the expected roll out of GST on 1st July, 2017 the State Government has therefore waived off renewal fees under VAT and other Commercial taxes for all dealers except Liquor and Petroleum Product dealers.

An innovative proposal in the budget is to reimburse VAT on aviation turbine fuel in excess of 1% under a scheme to be formulated. This is being done to promote airlines to connect Goa with small towns under the Regional connectivity scheme of Government of India; which in turn will promote tourism in the State of Goa.

For the past five years the tax on motor spirit i.e. petrol has been pegged, beginning since 2002, at 0.1% and has been increased gradually in a manner to ensure that petrol price in Goa has not crossed the threshold of ₹ 60/- per litre since 2002, which is probably one of the lowest in India. As compared to this the petrol prices even in neighbouring States of Karnataka and Maharashtra range from ₹ 72/- to ₹ 76/- per litre. However this budget proposes to enhance VAT on motor spirit to 15%. Even with this increase it is estimated that the price of petrol will increase only to ₹ 65/- per litre.

To curb pollution and encourage green initiatives, VAT on electric vehicles is proposed to be exempted. On the subject of vehicles, the peak motor vehicle tax at the time of registration of vehicles was around 18%. This resulted in purchasers trying to reduce the cost of registration by registering their vehicles outside Goa, Puducherry being one of the favourite registration destinations. To encourage vehicle owners to register their vehicles in Goa the Road tax has been reduced by 4% to 5% from peak rates depending on the cost of the vehicle.

Mining of iron ore is one of the key industries in Goa. Traders in iron ore were greatly affected by denial of Input tax credit by bringing sale of mineral ore under Entry No. 9 of Schedule G (List of goods on which no Input tax credit is admissible) of Goa Vat Act since 2012. With a more effective monitoring and regulatory framework in place for mineral ore sales and export, the said Entry No. 9 of Schedule G has been deleted thus allowing for Input tax credit on sale of mineral ore.

Other significant and unique non-tax initiatives in the Budget include conducting Financial Literacy Camp and Training programmes at School level to inculcate understanding of finance related topics and banking matters in young school children, employing retired army officers and jawans for administration and security/supervision of Govt. Medical college and as Tourist security force, Initiatives towards Garbage free Goa by 2020, setting up of a Startup promotion board to encourage startups in IT sector and Making Goa the 1st Beggar free State in India by establishing a full-fledged rehabilitation centre for beggars.

And finally, on your next holiday to Goa if you find your bottle of chilled beer to be slightly more expensive by ₹ 2 to ₹ 5, it is due to the increase in excise duty on beer. But you can relax in the thought that it is much cheaper than the rest of the country!!

Publications for sale

Sr. No. Name of Publication Rates (₹)
Edition Members Non-Members Courier Charges
1. Interpretation of Taxing Statutes – Frequently Asked Questions Dec., 2016 600.00 675.00 80.00
2. AIFTP – Of Milestone and Beyond – History Book Nov., 2016 400.00 450.00 80.00
3. “212 Frequently Asked Questions on Survey
– Direct Taxes”
Dec., 2015 240.00 270.00 60.00

Notes: 1. The above publications are available for sale; those who desire to buy may contact the office of the Federation.

2. Local/Outstation members not collecting from office are requested to add courier charges, as mentioned above.

3. Please draw Cheque/Draft in favour of “All India Federation of Tax Practitioners” payable at Mumbai.

Publications from AIFTP Western Zone for sale

Sr. No. Name of Publication Rates (₹)
Edition Members Non-Members Courier Charges
1. Limited Liability Partnership simplified through – Frequently Asked Questions Nov., 2016 200.00 225.00 60.00
2. Levy of Penalty u/s. 271(1)(c) – Some Important Issues Nov., 2016 200.00 225.00 60.00

Notes: 1. The above publications are available for sale; those who desire to buy may contact the office of the Federation.

2. Local/Outstation members not collecting from office are requested to add courier charges, as mentioned above.

3. Please draw Cheque/Draft in favour of “All India Federation of Tax Practitioners – Western Zone” payable at Mumbai.

The Finance Minister of Odisha, Mr. Pradip Kumar Amat, presented the Budget for Odisha for the financial year 2017-18 on February 27, 2017.

Budget Highlights

The Gross State Domestic Product of Odisha for 2017-18 at current places is estimated to be ₹ 4,12,481 crore. This is 8.8% higher than the revised estimate for 2016-17.

Total expenditure for 2017-18 estimated to be ₹ 1, 06,911 crore, a 14.3% increase over the revised estimate of 2016-17. In 2016-17, there was a decrease of ₹ 538 crore (0.5%) in the revised estimate over the budget estimate.

Total receipts (excluding borrowings) for 2017-18 are estimated to be ₹ 89, 062 crore, an increase of 11.1% over the revised estimate of 2016-17, total receipts exceeded the budgeted target by ₹ 1,857 crore (2.37%).

Revenue surplus for the next financial year is targeted at ₹ 6, 694 crore, or 1.6% of the state Gross Domestic Product (GDP). Fiscal deficit is targeted at ₹ 14, 435 crore (3.5% of state GDP).

• Departments of Housing and Urban Development, School Education and Water Resources saw most increase in allocations for the year 2017-18. On the other hand, the Panchayati Raj Department saw a marginal decrease in allocation in 2017-18.

Policy Highlights

• Irrigation: 2.95 lakh hectares of agricultural land to be provided irrigation in 2017-18. ₹ 1, 546 crore has been allocated for Parbati Giri Mega Lift Irrigation Scheme.

• UMMATI: A new scheme, Urban Transformation Initiative (UNNATI) is proposed to be implemented to improve urban roads and provision of civic amenities. ₹ 294 crore has been allocated for the scheme.

• Medication education: ₹ 400 crore will be spent on establishment of new medical colleges to increase the availability of doctors.

• Buxi Jagabandhu Assured Water Supply to Habitation (BASUDHA): An outlay of ₹ 315 crore and ₹ 750 crore respectively is budged to be spent for urban water supply and rural water supply under the programme.

• Integrated Financial Management System (IFMS):
Odisha’s public expenditure management system, IFMS which provides for electronic receipts and disbursements will be further upgraded to ensure entire chain of financial transactions becomes digital and paperless.

• NREGA corpus: To provide timely payment of wages under NREGA, a corpus fund of ₹ 300 crore is proposed to be established.

• The total expenditure in 2017-18 is targeted at ₹ 1,06,911 crore. The revised estimate for the total expenditure in 2016-17 was ₹ 93,515 crore, which is 0.5% (₹ 538 crore) less than the budgeted target of 2016-17.

• The expenditure in 2017-18 is proposed to be most through receipts (other than borrowings) of ₹ 89,062 crore and borrowings of ₹ 17,003 crore. Total receipts for 2017-18 (other than borrowings) are expected to be 11.1% higher than the revised estimate of 2016-17.

Table 1: Budget 2017-18 – key figures (in ₹ crore)

Items

2015-16 Actuals

2016-17 Budgeted

2016-17 Revised

% change from BE 2016-17 to RE 2016-17

2017-18 Budgeted

% change from RE 2016-17 to BE 2017-18

Total Expenditure
A. Borrowings
B. Receipts (except borrowings)
Total Receipts (A+B)

79,114 9,790 69,170

78,960

94,053
14,669 78,312

92,381

93,515 12,346 80,169

92,515

-0.6% -15.8% 2.4%

-0.5%

1,06,911 17,003 89,062

1,06,065

14.3% 37.7% 11.1%

14.6%

Revenue Deficit
(-) Surplus (+)
As % of state GDP

10,138

3.0%

3.683

1.0%

7,243

1.9%

6,694

1.6%

Fiscal Deficit
(-)Surplus (+)
As % of state GDP

-7,063

-2.1%

-14,532

-3.8%

-12,138

-3.2%

-14.435

-3.5%

Primary Deficit
(-) Surplus (+)
As % of state GDP

-3,720

-1.1%

-9.882

-2.6%

-7,488

-2.0%

-9435

-2.3%

Notes: BE is Budget Estimate, RE is Revised Estimate SDP for 2017 is considered to be ₹ 4,12,481 crore

Sources: Odisha State Budget Documents 2017-18, PRS

Expenditure in 2017-18

• Government expenditures can be divided into (a) capital expenditure, which affects the assets and liabilities of the state, and (b) revenue expenditure, which includes the rest of the expenses.

• Total capital expenditure is proposed to be ₹ 24,673 crore, which is an increase of 18.8% over the revised estimates of 2016-17. This includes expenditure, which leads to creation of assets (₹ 21,259 crore), and repayment of loans (₹ 3,415 crore), among others.

• Total revenue expenditure for 2017-18 is proposed to be ₹ 82,273 crore, which is an increase of 13.1% over revised estimates of 2016-17. This expenditure includes payment of salaries, administration of government programs, etc.

Table 2: Expenditure budget 2017-18 (in ₹ crore)

Item

2015-16 Actuals

2016-17 Budgeted

2016-17 Revised

% change from BE 2016-17 to RE 2016-17

2017-18 Budgeted

% change from RE 2016-17 to BE 2017-18

Capital Expenditure

20,308

19,609

20,775

5.9%

24,673

18.8%

Revenue Expenditure

58,806

74,443

72,740

-2.3%

82,237

13.1%

Total Expenditure

79114

94,053

93,815

-0.6%

1,06,911

14.3%

A.Debt Repayment

2,881

1,208

1,208

0.0%

3,4015

182.6%

B.Interest Payments

3,343

4,650

4,650

0.0%

5,000

7.5%

Debt Servicing (A+B)

6,225

5,858

5,858

0.0%

8,415

43.6%

Sources: Odisha State Budgets Documents 2017-18, PRS. Note: Capital expenditure includes (1) spending that creates assets, (ii) repayments on the loans taken by the government, and (iii) loans provided by the government.

Other announcements:

• Digital payments: All Government offices will be enabled to receive digital payments of all kinds including net banking, debit and credit cards and Aadhar-based payments.

• A sum of ₹ five crore is allocated to support start-ups under Odisha Start-up Policy.

Receipts in 2017-18

• The total revenue receipts for 2017-18 are estimated to be ₹ 88,932 crore, an increase of 11.2% over the revised estimates of 2016-17. Transfer from the centre in the form of share in union taxes is the largest component of revenue of the state. In 2017-18, it is estimated to increase by 10.9% to ₹ 31,422 crore.

• State’s own tax revenue is estimated to be ₹ 26,800 crore in 2017-18. The composition of the state’s tax revenue is shown in Figure 1. The tax revenue is expected to increase by 15.5% (₹ 3,600 crore) in 2017-18 over the revised estimates of 2016-17.

• Tax GSDP ratio is targeted at 6.5% in 2017-18, which is an increase over the revised estimate of 6.12% in 2016-17.

• Tax Revenue: Sales tax is the largest component of the tax revenue of the state. Sales tax, levied on the sale of goods in the state is expected to generate ₹ 15,840 crore in 2017-18. This is an increase of 16.3% from 2016-17.

• ₹ 3,600 crore is expected to be generated through state excise duties. This is an increase of 20% over the estimates of 2016-17.

• In addition, revenue will be generated through taxes on goods and paassengers, levy of duty on electricity, stamp duties, taxes on vehicles, etc.

• Upon the implementation of the Goods and Service Tax, the sales tax, along with other state taxes will be subsumed into State Goods and Services Tax (SGST).

• Non-Tax Revenue: Odisha has estimated to generate ₹ 9,500 crore through non-tax sources in 2017-18. There is a 7.7% growth from revised estimates of 2016-17.

• The government is estimated to generate ₹ 6,630 crore from non-ferrous mining and metallurgical industries, which is an increase of 7.4% over 2016-17 (RE). Further, the Government has estimated to generate ₹ 489 crore through major irrigation, ₹ 229 crore from minor irrigation and ₹ 119 crore
through coal and ignite in 2017-18.

The Finance Minister of State of Maharashtra presented the Bill to amend certain provisions of the Maharashtra Value Added Tax (MVAT) Act and the other laws administered by the State of Maharashtra. We shall first consider the amendments to MVAT Act. The Bill is stated to have been passed, however, the copy of the Act is not available in public domain till date. Therefore, my article hereinabove is based on the copy of the L.A. Bill No. XVIII of 2017 dated 26th March, 2017.

A-1 Amendment to Assessment & Appeal Provisions: Sections 23 & 26 of MVAT Act

Drastic amendments are made in appeal and assessment provisions. In an appeal against ex parte order the Appellate Authority is now empowered to set aside the ex parte order and remand the matter to the Assessing Authority. Such remand order should be passed within 9 months of the commencement of this Act for the appeals which are already filed on the commencement date. For the appeals which are filed after this Act coming into force, the Appellate Authority may remand the matter within six months from the date of filing the appeal. The Assessing Authority shall pass a fresh assessment under section 23(6) within 18 months in case of remand by the First Appellate Authority and within 36 months if the remand is by any other authority. The period of limitation starts from the date of communication of the order to the concerned authority.

A.2 Simultaneously section 23(11) which allowed cancellation of order by the Assessing Authority will no longer be applicable to the assessment orders passed after commencement of the present Act.

A.3 The grant of stay was a separate proceeding once the appeal is filed. The dealer could continue the matter on merit without grant of stay. In the present budget Section 23 sub-section 6A is introduced wherein it is made mandatory to file the appeal with the proof of payment of 10% of the disputed tax. However, with the liability in the order is on account of non-production of declaration then in terms of section 23(6) already existing in the statute book, the dealer will have to pay full tax for the declarations which are not received till passing of the order. If the appeal is against the separate order imposing penalty, the Appellate Authority can direct the deposit of amount, not exceeding 10% of the amount of penalty disputed by the appellant. The 10% payment of the disputed tax has the upper cap of ₹ 15 crores. Therefore, if the disputed tax is more than ₹ 150 crores, say for example, ₹ 200 crores, the maximum 10% amount payable is ₹ 15 crores only.

A.4 Section 23 sub-section 6B is inserted for making similar amendment for a Second Appeal to be filed before the Tribunal with the only difference that the 10% payable would be of balance amount of disputed tax. On the amount being paid as stated in sub-sectiond 6A and 6B the stay shall be granted to the appellant. Consequential amendments are made to Section 40 of the MVAT Act.

A.5 Time limit for filing appeal before the High Court is extended to 180 days from the date of communication of the order of the Tribunal.

A.6 Amendment to interest provision

By newly inserting the Section 30(5) the State Government is empowered to issue notifications to remit the whole or part of the interest in respect of any period, payable by the prescribed class of registered dealers, who are not able to pay the tax due to technical problem of automated system of Department or who have obtained the registration late.

A.7 State to have first charge for recovery

In terms of the newly inserted Section 37(2) the first charge of the State as mentioned in Section 37(1) shall be deemed to have created on completion of the 30 days of service of the demand notice issued by the Commissioner.

A.8 Interest on delayed refund

Sub-Section 1A is inserted into Section 53. This beneficial provision reduces the time for grant of interest if the refund due after the commencement of this Act, is delayed beyond 60 days.

A-9 Amendment to Section 8(3C)

An amendment was made to this section in 2012. This sub-section empowers the State Government to exempt fully from payment of tax, the transfer of property in goods involved in processing the textiles described in First Schedule of the Additional Duties of Excise (Goods of Special Importance) Act, 1957. The words (as it stood immediately before 8th April, 2011) are substituted by inserting a new clause a-1 to the effect that the notification that 2012 amendment shall be deemed to come into force from 8th April, 2011.

One more amendment is made to Section 8(3D). This sub-section empowers the State to exempt by way of notification, the transfer of property in goods involved in sizing and wrapping of yarn either retrospectively or prospectively.

A10. Amendment to Schedule Entries

Schedule Entry No. Description New Rate of Tax
Sr. No. 1 Schedule A-64 New Entry Sale, during the period from the 1st April 2005 to 31st March, 2016, of processed, semi-processed, semi-cooked, ready-mix, ready-to-eat, shelled sweet corn, whether or not sold

(a) In a frozen state, or Treasury.

(b) In a sealed container, or

(c) Under a brand name,

except when served for consumption

Condition:

(1) Tax should not have been collected from the customer.

(2) Tax should not have been paid into Government Treasury

NIL
Sr. No. 2 Schedule A-8A Card Swipe machines for merchant transactions NIL
Sr. No. 3 Schedule A-9A (a) Paddy, rice, wheat and pulses in whole grain, split or broken form

(b) The flour of wheat & rice including atta, maida, rawa and suji whether sold singly or in mixed form

(c) The flour of pulses including besan when sold singly and not mixed with flour of other pulses or cereals, sold during the period from 1st May, 2006 to the date immediately preceding the date on which GST law shall come into force

NIL
Sr. No. 5 Schedule A-25A Newly inserted Gas or electric fired human body incinerator NIL
Sr. No. 6 Schedule A-25B Geomemberine use for farm pond of thickness of not less than 500 mircons having BIS specification NIL
Sr. No. 7 Schedule A-33A Milk testing kit for detecting milk adulteration NIL
Sr. No. 8 Schedule A-44A new entry Soil testing kit for determination of soil nutrients NIL
Sr. No. 9 Schedule A-51(ix) Amsul NIL
Sr. No. 10 Schedule A-51, 59 All the goods described in this entry shall continue to be exempt from 1-4-2017 to the date immediately preceding the date on which GST law shall come into force NIL
Sr. No. 11 Schedule C-108 All the goods described in this entry shall continue to be exempt from 1-4-2017 to the date immediately preceding the date on which GST law shall come into force
Sr. No. 12 Schedule D Amendment is made in the heading. Schedule D as list of goods for which rate of tax is up to 60%
Sr. No. 13 Schedule D-11A New entry Aviation, turbine fuel (duty paid) sold within the State of Maharashtra during the period starting on 1st April, 2017 to 31st March, 2027 for flights under regional connectivity scheme as communicated by Airport Authority of India, subject to the conditions to be notified in the Official Gazette. 1%
Sr. No. 14 Schedule D-6 Aviation, turbine fuel (duty paid) other than those covered by Schedule C-8 and Entries 11 and 11A of this Schedule 25%
Sr. No. 15 Notification relating to liquor under Section 41(5) The Notification relating to liquor covered by D1, 2 & 3 dated 30th April, 2011 is modified. The exemption in Schedule 1 of this notification refer to a formula as MRP x 30/130 in respect of sales mentioned in column 3. This formula is now substituted by
MRP x 35/135 with effect from 1st April, 2017.

Some further amendments are expected to this notification. However, the same is not uploaded.

The Chief Minister (Finance Minister), Smt. Vasundara Raje presented Rajasthan State Budget in the State Assembly on 8-3-2017. The highlights of Rajasthan State Budget – 2017-18 are summarised as under:

In the Budget Speech the Hon’ble Chief Minister highlighted the preparation regarding GST as under:

• Officers trained for the proposed GST Law. 75 officers trained as master trainers on the Goods and Services Tax Network who, in coming months, would train officers and dealers regarding IT network

• Centralised Call Centre and Simulation Centre for GST to be established in Jaipur.

• To educate the stakeholders, workshops organised at Divisional and District levels.

• About 80% of the registered dealers have migrated to GST through primary enrolment.

• At Divisional and District level, GST help desk to be established.

• Commercial Taxes Department to be reorganised looking into the requirements under GST.

I. VAT

1. Amnesty Scheme – under RST/VAT & CST Acts: The Government of Rajasthan has introduced Amnesty Scheme, 2017 under RST/VAT & CST Acts. The Scheme shall remain in force w.e.f. 8-3-2017 to 30-4-2017.

Applicability of the Scheme: The Scheme shall be applicable to the dealer or person against whom total outstanding demand as on 8-3-2017 is less than rupees thirty crore and which has been created up to 31-12-2016 under the following Acts:

i. The Rajasthan Sales Tax Act, 1954;

ii. The Rajasthan Sales Tax Act, 1994;

iii. The Rajasthan Value Added Tax Act, 2003; or

iv. The Central Sales Tax Act, 1956.

Benefits under the Scheme: The demand of interest, penalty and late fee shall be waived to the extent as mentioned in the Notification No. F.12(14)FD/Tax/2017-92 dated 8-3-2017.

2. The Deemed Assessment Scheme under RVAT, CST, Entry Tax, Luxury Tax and Entertainment Act is to be introduced for the year 2015-16 and subsequent years.

3. Those dealers who have opted for Composition Scheme for exemption under Sarafa, Gems & Stone, Petroleum Retail Outlet and Tent Dealers, but could not fulfil the condition of Composition Scheme, have been given relief on payment of additional exemption fee and interest and may avail the benefit on or before 31-5-2017.

4. The rate of composition fee for dealers covered under section 3(2) has been notified and notification dated 11-4-2006 has been superseded and in view of amendment made in the section 3(2) of the RVAT Act, 2003, the rate of tax for different categories has been notified separately. Thus now manufacturer as specified in section 3(1)(b) will be liable to pay composition fee @ 2% having turnover up to ₹ 50 lakhs and the dealers covered under section 3(1)(c) having turnover up to ₹ 75 lakhs will be liable to pay composition fee @ 0.5% w.e.f. 1-4-2017.

5. In case of those industrial units who availed the benefits under the Sales Tax Exemption Scheme, 1987 and who could not comply with the condition of maintaining the average production for next 5 years, which are presently closed or declared sick under the BIFR and have not sold their land for the purpose other than industrial use, have been given relief under the CST Act.

6 (i) The proviso to Rule 21(8) of RVAT Rules, 2006 has been substituted and it has been provided that the Dy. Commissioner (Admn.) may allow the dealers for submission of application for cancellation of declaration forms up to the period of two years from the date of generation of such Form or up to 31-3-2017 whichever is later.

(ii) Notification No. 2017-95 – The proviso to Rule 17(14) of the Central Sales Tax (Rajasthan) Rules, 1957 has been substituted and it has been provided that the Dy. Commissioner (Admn.) can take application for cancellation of Forms up to period of two years from the date of generation of such Form or up to 31-3-2017 whichever is later.

7. As per amendment under Rule 40(8B) of RVAT Rules, 2006, for the year 2015-16 the awarder may furnish revised Form VAT-40E up to 31-3-2017. Further, new proviso to Rule 19(8) has been added for extending the time period to furnish revised VAT–11 up to 15-4-2017 due to generation of revised WCT TDS Certificates on the basis of revised Form VAT-40E.

8. No new tax in VAT, Entry Tax, Luxury Tax and Entertainment Tax except increase of VAT on cigarette by 15%.

9. Those contractors who have availed the benefits u/s. 8(3) of the RVAT Act and additional work is awarded or payment of addition receipt, were required to apply for exemption within 60 days. Now the time limit has been increased in such cases from 60 days to 2 years on payment of late fee.

10. If any dealer could not present appeal due to compulsory online filing, may file the hard copy along with memorandum and challans to the appellate authorities.

11. Notification No. 2017-88: Concessional rate for ATF @ 1% for the airline operator of RCS flights on RCS routes subject to conditions.

12. Notification No. 2017-89: Amendment in notification dated 2-6-2014 regarding sale to or purchase by Indian Railways of HSD subject to conditions.

13. Notification No. 2017-90: Exemption to sale or purchase by Indian Railways for the period 18-8-2008 to 1-6-2014 exceeding 10% on HSD subject to conditions.

14. Notification No. 2017-91: Amendment in Works Contract exemption notification dated 9-3-2015 w.e.f. 1-4-2015 substituting clause 3.1 of clause 3 of the said notification and providing for condonation of delay in filing of application within the time prescribed on payment of late fee. Further amendment also providing for condonation on payment of late fee regarding the submission of application for the additional work or enhancement of value of the contract. The term “date of award of works contract” in Form WT-3 is amended to “date of communication of additional work or enhancement of value of works contract, as the case may be”.

II. Entry Tax Act

1. Amnesty Scheme – under Entry Tax Act: The Government of Rajasthan has introduced New Voluntary Amnesty Scheme for Entry Tax – 2017 under the Rajasthan Tax on Entry of Goods into Local Areas Act, 1999. The Scheme shall remain in force w.e.f. 8-3-2017 to 30-4-2017.

Applicability of the Scheme: The Scheme shall be applicable to the dealer or the person against whom total outstanding demand as on 8-3-2017 is less than rupees Ten crores and which has been created on or before 31-12-2016.

Benefits under the Scheme: The demand of interest, penalty and late fee shall be waived to the extent as mentioned in the Notification No. F.12(14)FD/Tax/2017-96 dated 8-3-2017.

2. With effect from 8-3-2016, all kinds of yarn brought into local area in the State of Rajasthan exclusively for job work, has been exempted from Entry Tax subject to certain conditions.

3. The Government of Rajasthan has introduced Amnesty Scheme, 2017 under Entry Tax on Motor Vehicles Act. The Scheme shall remain in force w.e.f. 8-3-2017 to 30-4-2017. The scheme shall be applicable to the importer against whom any demand is outstanding under the Act as on 8-3-2017 and the same has been created up to 31st December, 2016.

III. Entertainment Tax Act

1. With effect from 1-8-2014 the Government of Rajasthan remits 100% Entertainment Tax leviable u/s. 4 of the said Act on the amount charged for rendering the service of online booking of tickets for admission to an entertainment by the service provider, on the condition that the amount of Entertainment Tax, so collected, is deposited with the Government.

IV. Electricity Duty

With effect from 8-3-2016, the exemption from Electricity duty, Water conservation Cess and Urban Cess payable by Jaipur Metro Rail Corporation on energy consumed in operation and maintenance of Metro Rail as specified in notification.

V. Stamp Duty Act

1. Stamp duty reduced from 5 to 3 per cent and registration fees to be reduced from one per cent to 0.25 per cent and maximum ₹ 10,000/- on partition deed of other than ancestral property.

2. Stamp duty on agreement to sale and power of attorney authorising sale of immovable property reduced from 3 and 2 per cent respectively to 0.5 per cent and registration fees on agreement to sale and power of attorney reduced to 0.25 per cent and maximum ₹ 10,000/-.

3. Stamp duty on the instrument of conversion of partnership firm, private limited company or unlisted public company into Limited Liability Partnership reduced to 0.5 per cent and registration fee reduced to maximum ₹ 10,000/-.

4. 100% exemption from interest and penalty allowed under the Amnesty Scheme if the stamp duty due is deposited up to 30-4-2017.

5. Stamp duty exempted on the instrument of transfer of sick micro small enterprise as defined in the Rajasthan Sick Micro and Small Enterprises (Revival and Rehabilitation) Scheme, 2015?

6. Other changes are made under Stamp Duty Act.

VI. Proposed amendments in the various Acts as per Finance Bill, 2017 issued on 8-3-2017

1. Section 3(2) of the RVAT Act 2003 with immediate effect has been substituted and the same is as under:

“(2) Notwithstanding anything contained in sub-section (1) a dealer other than those specified in clause (a) of sub-section (1) or the dealer or class of dealers as may be notified by the State Government, who purchases goods from a registered dealer of the State and sells, such goods or goods manufactured from such goods within the State, may opt for payment of tax on his turnover excluding the turnover of the goods specified in Schedule I, at the rate as may be notified under sub-section (3) of section 4, subject to the condition that annual turnover of such dealer does not exceed –

(i) Rupees fifty lakhs, in case of a dealer specified in clause (b) of sub-section (1); and

(ii) Rupees seventy five lakhs, in case of other dealer”.

2. Section 4 of the RVAT Act, 2003 has been amended with immediate effect and after section 4(3) the following proviso has been added:

“Provided that the State Government may notify different rates for different class of dealers”.

3. Section 32A has been inserted in the Luxury Tax Act given power to State Government to waive penalty and interest in certain cases.

4. Section 9D under Entertainment Tax Act has been inserted giving power to State Government to waive penalty and interest in certain cases.

5. Amendments had been made in the Rajasthan Stamp Act, 1998.

VII. Rajasthan Investment Promotion Scheme – 2014

1. Earlier investment in all kinds of edible oil extracting or manufacturing industry including ghanies, expellers except solvent extraction plants with oil refineries were not covered under the eligible list for benefits of subsidies and exemptions under RIPS 2014. However, as per amendment notification dated 8-3-2016 the above industries are now deleted from the non-eligible list and can avail the benefits, subsidies and exemptions under RIPS 2014.

2. Amendment under RIPS 2014 are incorporated for grant of additional benefits of subsidies and exemptions to the units established in a backward or most backward area to promote additional employment.

Forthcoming Programmes

Date & Month

Programme

Place

3/4 to 9/10-6-2017

International Tour-cum-Conference

Sri Lanka (Kandy & Colombo)