MVAT & CST 2011 Budget Highlights

Transcription

1 MVAT & CST 2011 Budget Highlights Parind Mehta 21 May 2011

2 Central Sales Tax

3 Goods of special importance Section 15 Limit for rate of Sales tax on declared goods increased from 4 percent to 5 percent 2

4 Maharashtra Value Added Tax

5 Registration Deposit S. 16(2), (2A); R. 60A w.e.f. 1 May 2011 Voluntary registration on deposit of INR 25,000 by way of security deposit not adjustable against tax liability but refundable Condition for grant of refund Filing of returns up to date of application Payment of taxes as per returns Application for refund within period prescribed Event Time limit for application Grant of refund Cancellation of registration certificate within 36 months from the date of registration Others Within 6 months from the date of service of the order of cancellation After 36 months from the end of the month of effect of the registration certificate but before the end of 48 months Within 90 days from the receipt of application Within 90 days from the receipt of application 4

6 Revised Returns - Amendment Section 20(4) w.e.f. 1 May 2011 Revised return to rectify omission or incorrect statement permissible before the expiry of 10 months from the end of the year to which the return relates Revision of return and revised return restricted to one time in each of the following: Event occasioning revision Discovery of any omission or incorrect statement before a notice for assessment Discovery of any omission or incorrect statement as a result of the audit report Intimation of any omission or incorrect statement under section 63 Time limit for revision 10 months from the end of the year 30 days after due date of audit report 30 days from the date of intimation 5

7 Revised Returns - Issues Multiple revision of returns not permitted Multiple Departments/ Sections ask dealers to file revised returns Effective date? Does it apply to - - Returns for periods from 1 May 2011; - Returns due after 1 May 2011; or - Any period including earlier periods. 6

8 Appeals Section 26(5)(c) w.e.f. 1 May 2011 Withdrawal of specific powers of the appellate authority to confirm, cancel or modify orders levying interest Appellate authority still empowered to pass an order it deems just and proper in appeal in cases other than those specified [Section 26(5)(d)] Should apply to periods after 1 May 2011 only 7

9 Refund Timelines Class of dealers Grant of refund 8

10 Refund - Timelines Section Subject Position prior to amendment Position after amendment effective 1 May 2011 Implications 51(2)(a) and 51(3)(b) Time limit for calling additional information and Bank Guarantee One month from the date of application for refund On receipt of application for refund The Commissioner can call for additional information at any time 51(2)(b) Time limit for claiming refund pertaining to the year of registration Within one and half year from the end of the year Within one and half year from the end of the month of application Special refund provisions for dealer in the year of registration removed and brought at par with other dealers 51(7) Time limit for filing application for refund Three years from the end of the year Eighteen months from the end of the year to which return relates Time limit for filing application for refund reduced Should be applicable to periods for which time limit has not expired 9

11 Refund - Class of dealers Section Subject Position prior to amendment Position after amendment effective 1 May 2011 Implications 51(3)(a)(iv) Class of dealers allowed to file application for refund immediately on filing of returns Dealers making interstate sale were covered Now such dealers will be at par with other dealers to file application at the end of the year Dealer making an interstate sale and claiming refund can file an application for refund only after the year end as against at the end of the month / quarter Explanation to 51(3)(a)(i) read with Rule 55A Exporters - class of dealer allowed to file application for refund immediately on filing of returns Application for refund in case of any exporter (direct / penultimate) on monthly / quarterly basis Exporter defined - Dealer whose turnover of export in the previous year / period under application is equal to or more than 50% of total turnover of sales (direct / penultimate) Dealer having turnover of exports equal to or more than 50% of the total turnover of sales is only allowed to file application for refund immediately on filing of returns 10

12 Refund Grant of refund Section Subject Position prior to amendment Position after amendment effective 1 April 2011 Implications Periods 1 April 2005 to 31 March For applications filed on or before 31 March Refund before 30 September (4) Time limit for grant of refund (from the date of application) Three months from the date of application or submission of information - maximum 6 months Periods 1 April 2010 to 31 March For applications filed on or before 31 March Refund before 30 June 2012 Periods after 1 April 2011 and application after 1 April Refund within one and half years from the end of the month in which application is filed The amendment results in extending the period for grant of refund 11

13 Audit Report Section 61(1) and (2A) w.e.f. 1 May 2011 Incomplete audit report punishable with penalty equal to one tenth percent of the total sales Explanation II - Audit report complete only if all the items, certifications, tables, schedules and annexures filled appropriately and arithmetically self-consistent Now onus is on the dealer to ensure that the VAT auditor issues a complete audit report 12

14 Liquor Rate Change Set-off provisions Sale of liquor purchased on or after 1 May 2011 Sale of liquor purchased on or before 30 April 2011 and in stock on 30 April

15 Liquor Rate Change Entry Description Old Rate New Rate Effective date Entry 1 Entry 2 Foreign liquor as defined from time to time in rule 3(6)(1) of the Bombay Foreign Liquor Rules, 1953 excluding wine Country liquor, as defined in Maharashtra Country Liquor Rules, percent 50 percent 1 May percent 50 percent 1 May 2011 Entry 3 Liquor imported from any place outside the territory of India as defined, from time to time, in rule 3(4) of the Maharashtra Foreign Liquor (Import and Export) Rules, 1963 excluding wine 25 percent 50 percent 1 May

16 Liquor Set off Provisions Rule Subject Before amendment After amendment 53 (7) Reduction in Set off Where the sale price of liquor sold by a dealer holding a Liquor Vendor License as specified is less than the MRP, the set-off available shall be computed as Sale Price/ MRP * Sum of set-off Deleted 54 (i) Non admissibility of set - off No set-off under any rule shall be admissible in respect of purchases of Indian Made Foreign Liquor or of country Liquor if the dealer has opted for composition under subsection (2) of section 42 No set-off under any rule shall be admissible in respect of purchases of liquor covered under entries 1, 2 and 3 of the Schedule D appended to the Act 15

17 Liquor Sale of liquor purchased on or after 1 May 2011 Class or Classes of Liquor Dealers Sale of Liquor Tax Liability Conditions Manufacturer holding license in PLL or CL I or BRL Manufactured by the dealer 20 percent of MRP (i) The manufacturer should be a registered dealer (ii) The manufacturer should mention the corresponding MRP along with the sale price in the sale bill Wholesaler holding license in FL I or CL II Purchased from registered dealers Brought or imported from outside the state NIL - Exempted 20 percent of MRP (i) The wholesaler should be a registered dealer (ii) Taxes have been paid or payable in respect of purchases corresponding to the sales (i) The wholesaler should be registered dealer (ii) The wholesaler should mention the corresponding MRP along with the sale price in the sale bill Retailer holding license in FL II or FL BR II or CL / FL / TOD III or country liquor bar holding license in CL III Purchased from registered dealers NIL - Exempted (i) The retailer should be a registered dealer (ii) Taxes have been paid or payable in respect of purchases corresponding to the sales 16

18 Liquor Sale of liquor purchased on or after 1 May 2011 Class or Classes of Liquor Dealers Sale of Liquor Tax Liability Conditions Restaurants and Hotels with 4 star or above grade holding license in FL III or E Purchased from registered dealers Brought or imported from outside the state 20 percent of Sale Price 20 percent of MRP plus 20 percent of Sale Price (i) The restaurant/ hotel should be a registered dealer (ii) Taxes have been paid or payable in respect of purchases corresponding to the sales (i) The restaurant/ hotel should be a registered dealer Restaurants and Hotels with 3 Star or less grade holding license in FL III or FL IV or E Purchased from registered dealers Brought or imported from outside the state 5 percent of Sale Price 20 percent of MRP plus 5 percent of Sale Price (i) The restaurant/ hotel should be a registered dealer (ii) Taxes have been paid or payable in respect of purchases corresponding to the sales (i) The restaurant/ hotel should be a registered dealer 17

19 Liquor Sale of liquor purchased from a registered dealer on or before 30 April, 2011 and in stock on 30 April 2011 Class or Classes of Dealers Tax Liability Conditions for exemption Wholesaler holding license in FL I or CL II Retailer holding license in FL II or FL BR II or CL / FL / TOD III or country liquor bar holding license in CL III Restaurants and Hotels with 4 star or above grade holding license in FL III or E Restaurants and Hotels with 3 Star or less grade holding license in FL III or FL IV or E 20 percent of MRP 20 percent of MRP 20 percent of MRP plus 20 percent of Sale Price 20 percent of MRP plus 5 percent of Sale Price (i) The wholesaler should be registered dealer (ii) The wholesaler should mention the corresponding MRP along with the sale price in the sale bill (i) The retailer should be a registered dealer (i) The restaurant/ hotel should be a registered dealer (i) The restaurant/ hotel should be a registered dealer Condition for set off on liquor and packing material thereof purchased on or before 30 April 2011 (i) Set off of taxes paid on purchases made up to 30 April 2011 will be allowed (ii) The dealer should submit a statement of closing as on 30 April, 2011 to the sales tax authorities by 31 May, 2011 in the prescribed form (iii) Set off will not be allowed if the stock statement is not submitted 18

20 Penal Provisions Section 74(1A) w.e.f. 1 May 2011 Rigorous imprisonment of not less than one year extendable upto two years along with fine for: Issue or production of false tax invoice for false claim of set off or refund or any other deduction reducing the tax liability or enhancing the refund with the intention of defrauding revenue Abeting such an offence 19

21 Schedule Entry and Rate Change Schedule Amendment - Highlights Copyright and IPR Notification u/s 8(5) of the MVAT Act 20

22 Schedule Amendment - Highlights Entry Description Old Rate New Rate Effective date Schedule C Entry A - 45 Schedule E Declared goods under Section 14 of the Central Sales tax Act, 1956 Sugar and fabrics as described from time to time in column (3) of the first schedule to the Additional Duties of Excise (Goods of Special Importance) Act, 1957 (58 of 1957) as it stood prior to the date on which the Finance Act, 2011 comes into force but excluding those specified in Schedule-C Spectacles protective and otherwise, other than corrective spectacles covered under Entry C 107(8) as medical devices and implants 4 percent 5 percent 1 May 2011 NIL NIL 8 April percent 12.5 percent 1 May

23 Schedule Amendment - Highlights New Entry Description Old Rate New Rate Effective date Entry C - 94 (c) Vada Pav (whether or not served for consumption in a hotel, eating house, etc.) 5 / 12.5 percent 5 percent 1 May 2011 Entry A 56A Pre fabricated domestic biogas units 5 percent NIL 1 May 2011 Entry C -108A Entry D - 13 Dry fruits excluding cashew kernels and cashew nuts and those to which entry 59 of Schedule A applies Aerated and Carbonated non-alcoholic beverage whether or not containing sugar or other sweetening matter or flavor or any other additives 12.5 percent 5 percent 1 May percent 20 percent 1 May

24 Copyright and IPR Entry C 39 w.e.f 1 May 2011 Goods of intangible or incorporeal nature liable to VAT at the rate of 5 percent Scope of copyrights amended to exclude copyrights for distribution and exhibition of cinematographic films in theatres and cinema halls Copyrights for Music, Satellite, DTH, Video/ VCD, Cable, etc continue to be taxable Separate Entry to specify live telecasting rights of events performed in Maharashtra as goods of intangible or incorporeal nature 23

25 Notification u/s 8(5) of the MVAT Act Notification u/s 8(5) of the MVAT Act Rate of tax increased from 4 percent to 5 percent Sale of goods excluding motor spirits to: Dealer being an electric power generating company as defined under Electricity Act, 2003; Dealer holding a licence for transmission and/ or distribution of electricity under Electricity Act, 2003; Mahanagar Telephone Nigam Limited, Bharat Sanchar Nigam Limited; Telephone Service provider holding a licence granted under the Indian Telegraph Act, 1885 or Indian Wireless Telegraphy Act, 1933 to establish, maintain and operate: (i) telephone services upto the subscribers terminal connection; (ii) national long distance service network; (iii) international long distance service network; or (iv) to the Telecom Infrastructure provider holding a registration certificate from the Department of Telecommunications as Infrastructure Provider Category-1 Sale of specified goods to Department of Space, Government of India, used in Satellite Launch System Sale of specified goods to Ministry of Defence and Ministry of Railways, Government of India 24

26 Composition Scheme for Bakers Incidence Subject Position prior to amendment Position after amendment effective 1 April 2011 Bakers For registered dealers For unregistered dealers 4 percent of the first 30 lakh rupees of the turnover 6 percent of the first 30 lakh rupees of the turnover 4 percent of the first 50 lakh rupees of the turnover 6 percent of the first 50 lakh rupees of the turnover Incidence Application for composition Composition effective At the time of registration From the date of registration Bakers On or before 30 June 2011 From 1 April 2011 On or after 1 April of any year From the beginning of the next financial year 25

27 Thank You Parind Mehta Disclaimer: The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation.