The Chief Minister (Finance Minister) presented Rajasthan State budget in the State Assembly on 9-3-2015 and the detailed impact thereof, is summarised as under :

1. Reduction in rate of tax under Rvat Act w.e.f. 9-3-2015:

2. Increase in rate of tax under RVAT Act w.e.f. 9-3-2015 :

3. The rate of tax under Composition Scheme for Gems Stones & Sarafa dealers has been amended. Earlier the composition fee was
Rs. 500/- for every rupees two lakhs or part thereof. Now the composition fee has been changed to
rupees one thousand five hundred for every rupees two lakhs or part thereof
w.e.f. 1-4-2015.

4. Exemption allowed from Tax Liability under Rvat Act

The following items have been exempt from tax under RVAT Act as per Notification No. F.12(23)FD/Tax/2015-194 dated 9-3-2015

5. Works Contract

i. The government has issued a notification No. F.12(23)FD/Tax/2015-206 dated 9-3-2015 w.e.f. 1-4-2015 under Exemption Scheme on payment of Exemption Fee by giving two options as under:

OPTION A :

Conditions

1. The dealer, who has opted for payment of exemption fee in lieu of tax under option A of Clause 1, shall purchase taxable goods within the state from the registered dealers of the State for the execution of works contract.

2. In case such dealer, procures or purchases any goods in any manner other than the manner as provided in clause (a) above he shall, in addition to the exemption fee, be liable to pay an amount equal to the amount of tax that would have been payable had the goods been purchased in the State from a registered dealer.

3. In this option the contractor will not be entitled to claim the Input Tax Credit on purchase of the taxable goods within the State of Rajasthan.

OPTION B

Conditions

1. The dealer, who has opted for payment of exemption fee in lieu of tax under option B of Clause 1, shall be entitled to purchase the goods involved in execution of works contract from outside the state i.e. goods purchased against
Rs.C’ form will be allowed.

2. In this option the contractor will not be entitled to claim the Input Tax Credit on purchase of the taxable goods within the State of Rajasthan.

ii. TDS (Tax Deduction at Source):

With effect from 1-4-2015 the rate of TDS under Works Contract will be applicable @ 6% of such sum, if payment is made to a dealer registered under the RVAT Act. In case of unregistered dealer, the rate of TDS under Works Contract will be applicable @ 7%. In case the exemption certificate is issued u/s. 8 of the RVAT Act, the awarder or any person authorised by him, shall deduct, in lieu of tax, an amount equal to rate of exemption fee as mentioned in the exemption certificate.

iii. Developers & Builders:

The government has amended the notification No. F.12(59)FD/Tax/2014-18 dated 14-7-2014 with effect from 1-4-2015. As per amended notification there are two options for payment of tax liability by the developers/builders as under :

Option A : Rupees one thousand three hundred for every two lakhs or part thereof, of the consideration received in the relevant period subject to the following conditions:

i. The developer/builder shall purchase the goods from within the state for execution of the works contract from a registered dealer of state;

ii. In case such dealer, procures or purchases any goods in any manner other than manner as provided in condition No. (i) above, he shall, in addition to lump sum amount, be liable to pay an amount equal to the amount of the tax that would have been payable, had the goods been purchased in the state from a registered dealer.

Option B : Rupees eight thousand for every two lakhs or part thereof, of the consideration received in the relevant period.

NOTE : i. The dealer opting to pay tax in lumpsum has to submit his option in the application for permission.

ii. In both the options the ITC will not be available.

Amendments in Rules

1. Under Rule 16, sub-Rule (3) of RVAT Rules, 2006 the time limit for finalisation of the assessment after closure of the business (cancellation of RC) was 30 days. Now the time limit has been increased to
180 days.

2. Under Rule 19 sub-Rule (8) the time limit for filing the Revised Return has been increased. Earlier the provision was nine months from the end of the relevant year.
Now the dealer can revise the Return within 15 days from the last date of submission of Annual Return. This will come into force
from 1-7-2015.

3. Late fee under Rule 19A for delayed submission of the Return has been reduced.

4. Under Rule 21 of RVAT Rules, 2006, the dealers may submit the declaration forms
up to 30-6-2015 in cases where assessments have been completed till 30th September, 2014.

5. Under Rule 22A now the turnover of the sub-contractor shall be deducted from the taxable turnover of the main-contractor in case the sub-contractor has opted the exemption scheme under Works Contract.

6. The Government has amended Rule 27 of RVAT Rules, 2006 and now all refunds will be
issued online w.e.f. 1-7-2015.

7. Forms VAT-10, VAT-22, VAT-23, VAT-24, VAT-36 and VAT-59 will be modified.

Others

1. In cases where the turnover of the dealer in the course of inter-State trade or commerce is more than 50% of the previous year and refund is due because of ITC, in such cases
the refund will be issued online within 30 days after submission of the Quarterly Return and filing of online application for refund.

2. The thrashhold limit of quarterly taxpayers whose annual tax liability was
Rs. 20,000/- for the year preceding to current assessment year, has been increased to
Rs. 50,000/-.

3. The Return under the VAT, CST, Entry Tax and Luxury Tax will be filed in one Return i.e. VAT-10.

4. The amount of court fee stamps for filing the appeals have been changed. For filing the 1st Appeal, there shall be no court fee stamps applicable. For filing the Memorandum of Appeal u/s. 83 (II appeal) the court fee of
Rs. 100/- will be applicable. For filing the Memorandum of Appeal U/s 84 (Revision to High Court) the court fee of
Rs. 150/- will be applicable

5. It is proposed to start online VAT-35, VAT-36 & VAT-36A.

Entry Tax Act

a) Following items have been exempt from Entry Tax:

b. The rate of Entry Tax has been reduced on the following items as per Notification No. F.12(23)FD/Tax/2015-211 dated 9-3-2015 :

Electricity Duty

Electricity duty @ 40 paisa per unit has been levied w.e.f. 16-3-2015 on consumption of self-generated energy for any purpose in respect of energy generated by Captive Power Generating Plants other than by the Diesel Generating sets.

Luxury Tax

Substantial amendments have been proposed and a new Composition Scheme is proposed to be launched.

Stamp Duty

Substantial amendments are proposed in Stamp Duty.

M. L. Patodi, Advocate &
CA. Ishu Jain, Kota (Rajasthan)