KEY NOTES Atulya Sharma, Advocate (Noida) Email. : pnsharmamail@yahoo.com The Value Added Tax (Vat Act) has been implemented in the state of U.P. Lot of section and rules are provided under the Vat Act. Although the dealers covered under the Vat Act should read and understand the provisions contained under all the sections, and rules, and schedule of Rate of Tax to understand all the provisions yet practically it is difficult to read and understand all the sections of the Vat Act, all rules etc in few days. In my opinion it is better to read, and understand the provisions of the Vat Act on the basis of its priorty. Few provisions of the Vat Act are such the compliance of which has to be made from 01-01-2008. Few provisions are such the compliance of which has to be made after a month and onwards. In my opinion the dealers should read the aforesaid provisions on the basis of its priority. I have tried through these Key Notes to provide the Zist of the Vat Act, and rules. The dealers who are not able to spare much time to read the provisions will get the basic idea of the various provisions of the Vat Act; secondly they will have an idea to read and understand the aforesaid provisions on the basis of its priority. 1. Levy of Tax (A) The dealers will be liable to pay tax as per the schedule of Rate of Tax at every point of sale. (B) The dealers will be liable to pay tax on the purchases effected by them from unregistered dealers of U.P. 2. Mention the Tax payer s Identification Number (TIN) Every registered dealer shall mention the Tax payer s Identification Number (TIN) allotted to him, on all the returns, treasury challans, all the correspondence, statements and while making purchases, shall give his name address and TIN number to the supplier to the selling dealer who shall mention such Tin Number on the invoices bills, challans etc issued by him. 3. Schedule of Rate of Tax:-
The dealers should read the schedule of Rate of Tax and check the rate of tax on the items in which they are dealing. 4. That the following type of invoices, bills, challans etc will be maintained and issued by the dealers, as applicable:- (A) (A) (B) (C) (D) (E) (F) Tax invoice Sale Invoice TAX INVOICE (i) Purchase Invoice Bill/ Cash Memo Challan/ Transfer Invoice Excise Invoices, will be issued by the Excisable units. Every registered dealer who is liable to pay tax on sale of all taxable goods, shall issue tax invoice and shall charge separately the amount of tax payable if goods are sold to a) A Registered dealer of U.P. or b) An official or personnel of any foreign diplomatic mission or consulate in India; or c) The United Nations or any other similar International body, entitled to privileges under any convention to which India is a party; or d) Any consulate or diplomatic agent of any mission, the United Nations or other body referred to in sub-clause (b) or (c); or e) Any developer or co-developer of any Special Economic Zone (SEZ), for use or consumption in the authorized operations. Tax Invoice should contain the following particulars:- (a) 1. Name and complete address of selling dealer. 2. Name and address of its branch or depot if ay 3. Tax payers Identification Number of selling dealer 4. Tax invoice book No. 5. Tax invoice serial No. 6. Date of issue 7. Signature of the person authenticating the tax invoice. 8. Name and Address of the purchasing dealer 9. Tax payer s Identification Number of purchaser if any
10. Description of goods 11. Quantity or measure of goods 12. Value of goods 13. Other charges if any 14. Amount of discount if any 15. Rate of tax 16. Amount of tax charged 17. Total amount of tax invoice and 18. Signature of person issuing tax invoice (b) That according to the performa issued by the trade tax, department, U.P. the following informations should be also contained in the Tax Invoice:- (19) Phone numbers of the selling dealer (20) Mobile number of the selling dealer (21) Phone number of the purchasing dealer (22) Mobile number of the purchasing dealer (B) In my opinion you should cover the aforesaid information s mentioned in clause (b) also in the Tax Invoice to avoid the unnecessary litigations. SALE INVOICE (i) (a) Every registered dealer who is liable to tax on sale of any Non Vat Goods. Sale of any (b) Sale of taxable goods except Non vat Goods to a unregistered dealer. Every registered dealer, who is liable to pay tax on (a) Non-Vat goods - shall issue a sale invoice and shall charge separately the amount of tax realized by him; or (b) Taxable goods except non-vat goods to a unregistered dealer While making Sale of such goods to un-registered dealer, shall issue a sale invoice mentioning name and complete address of purchasing dealer, No. tax shall be charged separately on such sale invoice.
(iiii) The sales invoice raised for Non Vat goods should contain the following particulars:- (iv) 1 Name and complete address of selling dealer. 2. Name and address of its branch or depot if any 3. Tax payers Identification Number of selling dealer 4. Sale invoice book No. 5. Sale invoice serial No. 6. Date of issue 7. Name and Address of the purchasing dealer 8. Tax payer s Identification Number of purchaser if any 9. Description of goods 10. Quantity or measure of goods 11. Value of goods 12. Other charges if any 13. Amount of discount if any 14. Rate of tax 15. Amount of tax charged 16. Total amount of tax invoice and 17. Signature of person issuing tax invoice The sale invoice raised for taxable goods other than non Vat goods to a unregistered dealer, it should contain the following particulars:- 1. Name and complete address of selling dealer. 2. Name and address of its branch or depot if any 3. Tax payers Identification Number of selling dealer 4. Sale invoice book No. 5. Sale invoice serial No. 6. Date of issue 7. Full name and complete address of the purchasing dealer. 8. Description of goods 9. Quantity or measure of goods 10. Sale price of goods.
11. Other charges if any 12. Amount of discount if any 13. Total amount of tax invoice and 14. Signature of persons issuing sale invoice. (C) Bill (i) Every taxable dealer in respect of sale of all goods in respect of which tax invoice/sale invoice is not to be issued, shall issue Bill to the purchaser. For the purpose of clause (i) of sub-section (4) of section 22, rupees two hundred fifty shall be the prescribed sale value of goods for a single sale of any goods. (iii) Every taxable dealer shall, in respect of sale of all goods, where (v) (i) Sale value of single sale exceeds the amount of Rs.-250/- (iii) (iv) Purchaser of goods demands a bill; or Any other law prescribes for issue of a bill in respect of sale of any goods; or Selling dealer as a practice issues a bill in respect of sales made by him, issue to the purchaser a bill in the prescribed manner containing such particulars as may be prescribed. (iv) Separate bill book will be maintained for the following type if sales:- (i) Sale of taxable goods Sale of non vat goods and exempted goods. Bill book should contain the following particulars:- 1. Name and complete address of the selling dealer 2. Name and address of branch or depot from where goods sold. 3. Tax payer identification Number of selling dealer 4. Bill book number. 5. Bill serial No. 6. Date of issue
7. Full name and complete address of the person purchasing the goods. 8. Description of goods 9. Quantity or measure of goods 10. Value of goods 11. Other charges if any 12. Amount of discount if any 13. Total amount of bill 14. Such other details as dealers consider necessary. 15. Signature of person issuing bill. (D) Cash Memo (i) Every taxable dealer in respect of sale of all goods in respect of which tax invoice/sale invoice is not to be issued, shall issue Cash Memo to the purchaser. For the purpose of clause (i) of sub-section (4) of section 22, rupees two hundred fifty shall be the prescribed sale value of goods for a single sale of any goods. (iii) Every taxable dealer shall, in respect of sale of all goods, where (i) Sale value of single sale exceeds the amount of Rs.-250/- (iii) (iv) Purchaser of goods demands a cash memo. Any other law prescribes for issue of a cash memo in respect of sale of any goods; or Selling dealer as a practice issues a cash memo in respect of sales made by him, issue to the purchaser a cash memo in the prescribed manner containing such particulars as may be prescribed. (iv) Separate cash memo book will be maintained for following type of sales:- (i) Sale of taxable goods Sale of non vat goods and exempted goods.
(E) (v) Cash Memo should contain the following particulars:- 1. Name and complete address of the selling dealer 2. Name and address of branch or depot if any 3. Tax payer identification Number of selling dealer 4. Cash memo book number. 5. Cash memo serial number. 6. Date of issue 7. Description of goods 8. Quantity or measure of goods 9. Value of goods 10. Other charges if any 11. Amount of discount if any 12. Total amount of cash memo 13. Such other details as dealers consider necessary. 14. Signature of person issuing cash memo. Purchase Invoice (i) (a) It will be issued by a registered dealer, while making purchases of taxable goods from an un-registered dealer. (b) It will be in 02 copies and in bound form. (c) Seller s signature / Thumb impression will also be taken on the purchase invoice. Purchase Invoice should contain the following particulars:- 1. Name & address of the purchasing dealer. 2. Name and address of the branch or depot from where goods are being purchased. 3. TIN No. of purchasing dealer. 4. Purchase invoice book No. 5. Purchase invoice number 6. Date of issue 7. Full name and complete address of the person/selling dealer the goods. 8. Description of goods.
9. Quantity or measure of goods. 10. Purchase value of goods. 11. Any other charges if paid. 12. Total amount of purchase invoice value. 13. Signature or thumb impression of person selling goods. 14. Signature of the person issuing purchase invoice. 15. Such other details as the purchasing dealer consider necessary if any Tax Invoice, Sale Invoice etc other provisions:- 1. That the serial number of the aforesaid invoice numbers, bills, challans etc will be started from the serial numbers 001. 2. That the serial numbers of books related to aforesaid invoices, bills, challans etc will be started from serial number 1. 3. The aforesaid invoices, bill etc will be in bound from and will be printed. Each book will contain 50 invoices, bill etc. 4. Three copies of every tax invoice, sale invoice and bill, marked as Original, Duplicate and Office Copy, shall be prepared. 5. The tax invoice, sale invoice, bill etc shall be issued from bounded book. 6. First copy marked as Original and second copy marked as Duplicate shall be issued to the purchaser and third copy marked as Office Copy shall be retained by the selling dealer. 7. The copy marked as Duplicate shall accompany the goods during transport of goods to their destination. 8. That the separate Sale invoice books shall be maintained for Central Sales and Export Sales. 9. Two copies, of every purchase invoice referred to in sub-rule (8) and cash memo referred to in sub-rule (8), marked as Original and Office Copy, shall be prepared and be issued from bounded purchase invoice book or cash memo book, as the case may be. Original copy of purchase invoice and original copy of cash memo shall, respectively, be delivered to the seller and purchaser of goods: 10. Every tax invoice, sale invoice, bill, cash memo and purchase invoice shall be in legible form. 11. For each assessment year book no. and serial no. in first taxinvoice or sale-invoice book shall begin with serial no. 001 and each book shall contain fifty tax or sale-invoices in triplicate and on other tax-invoices, sale-invoices, tax-invoice books and sale-invoice
books, book number and serial number shall order. be in ascending 12. Each tax-invoice shall be pre-authenticated by the person who has been authorized by the dealer in this behalf and intimation in this respect has been furnished by the dealer to his registering authority. 13. (A) Separate sales invoice book shall be maintained for following type of sales:- (B) (a) (b) Sales of Non Vat Goods. Sales of Taxable goods to a unregistered dealer. In respect of sales in the course of inter-state trade or commerce, sale-invoices shall be issued from separate saleinvoice book. 14. Bill book and cash memo book shall be separate for the sale of- (i) Taxable goods other than non-vat goods; and Non Vat goods and exempted goods. 15. If the purchaser refuses to give his name, address, and TIN, then seller will not issue tax invoice to such purchaser. 16. Where account books are maintained on computer, after the end of every working day dealer shall take hard copy of the tax invoice, sale invoice, bill or cash memo and shall keep them in bound form for every month not less than in fifty copies each. 17. Where account books are maintained on computer, after the end of every working day dealer shall take hard copies of the tax of tax invoices, sales invoices, bills, purchase invoice etc and shall keep them in bound form for every month in fifty copies each. 18. The commissioner may issue instructions and clarifications regarding form, maintenance and issue of tax invoice, sale invoice, bill, cash memo, and purchase invoice from time to time. 19. Prescribed performas of Tax Invoice, Bill etc:- (i) (iii) That we have made the performas of aforesaid Tax Invoice, Bills, Challans/Transfer invoice etc you can adjust the columns of it according to your performa. That the department has prescribed the performa of Tax Invoice. The copies of aforesaid performas are available in our office. 20. (A) That the dealers who will issue different type of invoices, should issue the invoices carefully so that the different type of invoice may not be issued for a particular type of sale.
(B) That you should authorize maximum possible persons to authenticate the aforesaid invoices, so that your work may not suffer on account of non availability of one or more persons. 21. Where a dealer does not charge the tax separately as above, he will calculate the tax according to the formulas given under the rules, and will deposit the due tax. 22. That the exporters normally make invoices few days earlier, from the date of dispatching the goods from there business premises, such exporters should make the challan/transfer invoice on the date of sending the aforesaid goods. (E) Challans/Transfer Invoice (a) Challan or transfer invoice will be issued in case of sending taxable goods to another dealer whether as a result of sale or otherwise. (b) Challan or transfer invoices should contain the following particulars:- i) Name and address of the dealer. ii) iii) iv) Name of branch or depot. TIN No. of dealer consigning or delivering goods. Challan/Transfer Invoice Book No. v) Challan/Transfer Invoice No. vi) Date of issue vii) Signature of authorized person who has authenticated the challan or invoice. viii) ix) dealer, if any; Name and address of the dealer or person to whom goods are delivered or consigned. Taxpayer s Identification Number of consignee x) Sale or stock transfer. xi) xii) consigned; xiii) Time of removal of goods Following details in respect of goods delivered or Description of goods (b) Identification mark or batch no. if any, (c) Quantity or measure of goods (d) No. of packets (e) Actual or estimated value of goods; xiv) Tax-invoice or sale-invoice no. and date (if issued at the time of sale)
(xv) Mode of transportation (xvi) Signature and status of person issuing challan or transfer invoice. (c) (i) The dealer shall prepare the challan or transfer invoice referred to in sub-section (5) of section 21 in three copies marked Original. (d) (h) (i) The aforesaid challan or invoice will be issued from a bounded book. The following particulars shall be printed on each challan or transfer invoice. Name and address of the dealer; Name of branch or depot; (i) Taxpayer s Identification Number (Registration Number) of dealer consigning or delivering goods; (iii) (iv) (v) Book No.; Serial No. Date; Column of Signature of the authorized person who has authenticated the challan or invoice (e) That the serial number of the aforesaid Challans/Transfer Invoice will be started from the serial numbers 001. (f) That the serial numbers of book related to aforesaid Challans/Transfer Invoice will be started from serial number 1. (g) The aforesaid Challans/Transfer Invoice will be in bound from and will be printed. Each book will contain 50 Challans/Transfer Invoice. For each assessment year book no. and serial no. in first challan or transfer invoice book shall begin with serial no.001 and each book shall contain fifty challans or transfer invoices in triplicate and on other challan or transfer invoice books, both numbers will be in ascending order. Original and Duplicate copies of challan or transfer invoice shall be delivered to the person transporting goods for delivery to the consignee of goods and shall be delivered by such person to the consignee along with goods. Second copy
(j) (k) (l) (m) (n) F. Excise Invoice:- shall be returned by the consignee of goods to the dealer who has dispatched or delivered goods: Where goods are delivered to the dealer or its representative at the place of the seller, the purchasing dealer shall, after acknowledging the receipt of goods, deliver the second copy of the challan to the selling dealer. Third carbon copy of challan or transfer invoice shall be preserved by the dealer in the challan book or transfer invoice book as part of records. Where the transfer invoice or challans are maintained in computer the hard copy of the same shall be kept in bound book of fifty in numbers. Except as provided in sub-section (4) every dealer liable to pay tax while consigning or delivering any taxable goods to another dealer whether as a result of sale or otherwise, shall issue to the purchaser or consignee of goods, a legible challan or transfer invoice in the prescribed manner containing such particulars, as may be prescribed. The commissioner may issue instructions and clarifications regarding form, maintenance and issue of challan or transfer invoice from time to time. That the serial number of Excise invoices will be continued as it is. G. Circular dt.26.12.2007 issued by the commissioner, trade tax, U.P. That according to a circular dt.26.10.2007 the Commissioner trade tax, U.P. has given some relaxation to the dealers in compliance of the provisions of the Vat Act. The dealers can continue the serial numbers of the invoices, bills etc, subject to conditions mentioned in the aforesaid circular. In such cast the dealers are not liable to start the serial number of invoices challans etc from 001. 5. Furnish the details of Closing Stock:- (A) (B) (c) That the dealers will furnish the details of stock of raw materials, packing materials, semi-finished goods, finished goods etc, available with the dealers on the date of implementation of the Vat Act. That the dealers are liable to submit the aforesaid details within 30 days from the date of implementation of the Vat Act, before the assessing officer in the prescribed performa. That the dealers will get the input tax credit on the goods available in the aforesaid stock, which had been purchased
by the said dealers from the registered dealers of U.P. within a period of 6 months ending on the date of commencement of this Act and tax had been paid on the sale of aforesaid goods under the UPTT Act. 6. (i) Maintenance of Account books (a) (b) (c) (d) (e) That the dealers are liable to maintain the accounts books as provided under the provisions of the UPTT Act, simultaneously the dealers will maintain the accounts books in such a manner that it should clearly show the separate details of purchases, sales receipts, and dispatch of goods for each of the following purposes Local Sales or Central Sales or Export Sales or Consigns goods to other dealer for sale inside the State, or Consigns goods outside the State otherwise than as a result of sale. (iii) (iv) (v) A manufacturer liable to pay tax under this Act shall, in addition to the accounts referred to in other sub-sections, maintain stock books in respect of goods used or consumed in manufacture as well as the products obtained at every stage of production. A dealer who maintains or keeps books, accounts or documents in a computer, shall also maintain day to day print out of all such books, accounts and documents. Every dealer liable to pay tax shall prepare an inventory of all goods held in stock, as mentioned hereunder, along with their purchase value, on following dates: (a) (b) (c) (d) Goods held in opening stock on the date on which the dealer becomes liable to pay tax; Goods held in closing stock on the last date of each assessment year; Goods held in closing stock on the date of discontinuance of business; In case of a dealer who has opted for payment of tax or lump sum under section 6, goods held in opening stock on the date from which provisions of section 6 cease to apply: In case of goods returned or rejected by the purchaser, a credit note shall be issued by the selling dealer to the purchasing dealer and debit note shall be issued by the
(vi) (vii) purchasing dealer to the selling dealer containing such requisite particulars as may be prescribed: The accounts, documents and the stock books required to be maintained under this section shall be preserved by the dealer for such a period of 8 years. If in respect of any particular assessment year, gross turnover of purchase or sale or both, as the case may be, of any dealer exceeds rupees one crore, then such dealer shall get his accounts verified and audited by a Chartered Accountant or a Cost Accountant or any other authority specified by the State Government within six months from end of that assessment year and obtain within that period a report of such audit in the prescribed form duly signed and verified by such specified authority alongwith such particulars as may be prescribed. A true copy of such report shall be furnished by such dealer to the assessing authority within such period as may be prescribed. 7. Issue and use of declaration forms for bringing the goods from outside the state into the state of U.P. (i) (A) A registered dealer desirous of importing or receiving into the State from any place outside the State, goods notified under or referred to in sub-section (1) of section 50 in excess of the quantity, measure or value specified thereunder, use Form XXXVIII or XXXIX for importing or receiving the said goods. (B) (C) (D) The registered dealer shall send the original and duplicate portions of the form to the selling dealer or consignor of the other State after filling in all the required particulars and signing it. He shall retain the Counterfoil himself. Every registered dealer to whom a declaration form is issued under sub-rule (4) shall maintain in register in Form XXXV a true and complete account of every such form. If any form is lost, destroyed or stolen, the dealer shall forthwith report the fact to the Assistant Commissioner, make appropriate entries in the aforesaid register and take steps to issue proper public notice of such loss, destruction or theft. A registered dealer or a person other than a registered dealer desirous of importing or receiving into the State (from any place outside the State) by post, rail, river or air, any goods, notified under sub-section (1) of section 50, in excess of quantity, measure or value specified thereunder, shall submit the original and duplicate portions of the declaration or certificate as the case may be along with the prescribed documents duly filled in and signed by him, to
(E) (F) the assessing authority within whose territorial jurisdiction he carries on business or, if he does not carry on business ordinarily resides. The Assessing Authority to whom a declaration or certificate is submitted for endorsement shall, after satisfying itself about their correctness and completeness, sign and stamp them with its official seal, retain the original portion of the declaration or the certificate and return to the registered dealer or the person other than the registered dealer, as the case may be, the duplicate portion thereof after endorsing thereon a receipt for the retained original portion. The Assessing Authority may, at its discretion, direct the dealer or the person concerned to furnish copies of Bill or Cash Memo or Challan or Invoice received by him from the selling dealer or the consignor of the other State for verification of the contents of the declaration or the certificate. The concerned authority of the rail, air or post shall not deliver the consignment to the dealer or person concerned unless the declaration or certificate dully endorsed as aforesaid, is furnished before him. That according to a circular dt.28.12.2007 the import declaration forms available with the dealers, can be used by such dealers for bringing the goods from outside the state of U.P., till further instructions of the Commissioner, Vat, U.P. 8. Use of Transport memo Transport memo referred to in sub-section (4) of section 21 shall be in Form XXI and blank forms shall be issued to a registered dealer by his assessing authority. (A) Where any registered dealer consigns or delivers any goods or class of goods specified or notified exceeding quantity, value or measure notified under sub-section (4) of section 21 shall, after filling necessary columns on the Original Copy of Form XXI deliver such copy to the person to whom goods are delivered for transportation to the business place of the consignee dealer. (B) The dealer shall fill the form and punch the required box covering the minimum value of goods and it shall be carried along with the goods. (C) The dealer shall keep the account of all blank forms received from his assessing authority and forms used by him in Form XXII and shall retain its remaining portion and give the details of use of such forms to the assessing authority as and when asked by him.
(D) The owner or person in-charge of the vehicle shall duly fill and deliver the form, to the purchasing dealer at the time of delivery of the goods. (E) The purchasing dealer shall retain the used form safely till the completion of assessment proceedings and shall produce as and when demanded by the assessing authority. 9. Definition of important terms such as:- (a) (b) (c) Non Vat goods. Vat goods. 10. Contractors:- (I) Capital goods. For the purpose of determining the taxable turnover of sale of such goods, the amounts specified below shall be deducted if they are included in the gross amount receivable in respect of the works contract:- a) All amounts representing the value of goods consumed in the execution of the works contract; b) All amounts representing the value of exempt goods and amount of profit thereon; c) All amounts representing the rent paid or payable in respect of machinery and other equipments taken on hire for use in the execution of such works contract; d) All amounts representing the value of service and labour and profit thereon; e) All amounts representing the value of goods property in which has been transferred in the execution of the works contract as a result of sale in the course of inter-state trade or commerce; f) All amounts representing the value of goods property in which has been transferred in the execution of the works contract as a result of sale in the course of export of goods out of the territory of India or sale in the course of import of goods into the territory of India; g) All amounts representing the value of goods in which property in goods has been transferred as a result of a sale outside the State; h) All amounts representing the value of non-vat goods purchased from within the state in the circumstances in which the dealer executing the works contact himself is liable to pay tax on turnover of purchase of such goods;
(II) (iii) (iv) (v) i) All amounts representing value of non vat goods where such goods are purchased by the dealer from a registered dealer. Explanation: For the purpose of clauses (a), (b) and (e) to (h), value of goods referred to in such clauses include amount of profit thereon. Where any amount has been deducted by the contractee from the amount of the contract on account of breach of any condition of the contract, such amount shall be deemed part of amount payable to the contractor in respect of such contract Where accounts maintained by the contractor does not show separately the value of labour and services and amount of profit accrued on such labour and services, or accounts maintained by the dealer are not worthy of credence or if the dealer has not maintained accounts, for the purpose determining turnover of goods in which transfer of property in goods has taken place, an amount, representing twenty percent of gross amount receivable, shall be deducted towards labour and services and amount of profit accrued thereon. Amounts of following nature shall not be deducted from the gross amount receivable. (A) (B) (C) Any amount proposed to be deducted in the name of any tax or fee or any other levy; Any amount which has been deducted by the contractee from the contractor as demurrage or penalty or a fine or in any other name for breach of any conditions of the contract or otherwise; Any amount which has been deducted by the contractee from the contractor as compensation; Where period of execution of a works contract is spread over several tax periods or several assessment years, the aggregate, of all amounts of deductions towards labour and services; and amount of profit accrued thereon, shall not exceed the percentage of the gross amount receivable in respect of execution of such works contract. (vi) (a) That the provisions has been made under the Vat Act for compounding scheme. (b) That the compounding scheme for contractors will be applicable only after issuance of the notification regarding it.
11. Dealers who give the goods on Lease basis:- For the purpose of determining the taxable turnover of such sale of such goods, the amounts specified below shall be deducted if they are included in the gross turnover- (a) (b) (c) The amount representing the amount receivable in respect of transfer of right to use any exempt goods; Amount receivable as penalty for defaults in payments or as damages or any loss caused to the goods by the person to whom such transfer was made; Amount receivable in respect of transfer, delivery or supply of goods under the contract or agreement of transfer of right to use goods for any purpose where such transfer, by the lessor to the lessee, is made as a result of a sale (i) (iii) In the course of inter-state trade or commerce; or Outside the State; or In the course of export of the goods out of the territory of India or in the course of import of goods into the territory of India. 12. Tax deduction by Contractee or others:- (A) (B) (C) (D) In respect of amount of tax deducted at source by a contractee in respect of payments to the contractor or by a contractor in respect of payment to a sub-contractor or by a lessee to a lessor or by purchaser to seller, certificate referred to in sub-section (7) of section 34 shall be issued by the contractee to the contractor or by a contractor to his sub-contractor or by a lessee to a lessor or by purchaser to seller, as the case may be, in Form XXXI. Every person, responsible for making deduction of amount of tax in accordance with provisions of sub-section (1) of section 34, may obtain blank Certificates in Form XXXI from the assessing authority having jurisdiction over the place of business (in case of a dealer having jurisdiction over the principal place of business) after payment of fee at a rate of five rupees per form. That the contractees are liable to submit the monthly details of payment made by them to the contractors, TDS (VAT) deducted by them from the contractors, and TDS (VAT) deposited by the contractees to the assessing officers. Allotment of Number to a person responsible for making tax deduction at source.- Except a registered dealer every other person responsible for making tax deduction at source in
(E) accordance with provisions of section 34, before he makes deduction of any amount, shall apply in Form XXIII to the registering authority, having jurisdiction over the principal place of business of such person, for allotment of tax deduction number. Without prejudice to any other mode of recovery, payment or collection of tax under this Act, the State Government may, by notification in the Gazette, direct that, in a specified case and in the specified circumstances but subject to such conditions as may be specified, every specified person responsible for making payment to the selling dealer, for discharge of liability on account of valuable consideration payable on sale of goods in such cases as may be specified, shall, at the time of making such payment to the seller, either by credit or in cash or in any other manner, towards satisfaction of tax payable by the dealer on account of sale of any taxable goods, deduct an amount determined in the manner specified: 13. Units Exempt U/s-4A of the UPTT Act. The dealers of following categories may, subject to such conditions as may be specified, be granted facility of moratorium for payment of tax by the State Govt.: - (A) (B) A manufacture, who (i) Held an Eligibility certificate immediately before the date of VAT Act or who may be granted Eligibility certificate on or after the date of VAT Act; and Was availing facility of exemption from payment of tax under the U.P. Trade tax Act and whose period of exemption has not expired on the date immediately preceding the date of VAT Act; A manufacture to whom facility of moratorium for payment of admitted tax in lieu of exemption from payment of tax has been granted under the U.P. Trade Tax Act and where such period of exemption and the monetary limit of moratorium has not expired on date immediately preceding the date of vat Act. 14. Job Works:- (A) That the goods will be sent by a dealer to other dealer for job work through the challans. (B) That after job work the job worker will return the goods to the dealer through challans.
(C) That if a dealer uses some materials in the aforesaid job work which has been purchased by him from the registered dealers of U.P. and the said materials has been passed on to the said customers, in such case the Job Worker will be entitled for input tax credit on the said U.P. Purchases. (D) (i) That in my opinion the dealers who are doing job work and do not use any materials in it, should make a invoice from a separate invoice book mentioning as under on the said invoice. Invoice book for job work. That the aforesaid dealers should inform the assessing officer about maintaining the aforesaid invoice book. 15. Registration under the Vat Act:- (A) The dealers registered under the UPTT Act will continue to be a dealer under the Vat Act. (B) (i) For the purpose of obtaining registration certificate under the Act, the dealer shall present application in Form VII-G in case of Government Department and in Form VII in other case, as the case may be, completed in all respects before the Registering Authority of the Circle in which principal place of his business is situated. Each registration application shall be accompanied by satisfactory proof of deposit of the fee along with late fee, if any, and penalty specified in the Act, where payable and certified copy of any two of the following; (a) Electoral Identity Card issued by Election Commission of India; (b) PAN Card issued by Income Tax Department, Government of India; (c) (d) Passport; Bank Passbook Provided that the registering authority shall not accept incomplete application for registration. That the dealers who are registered under the provisions of the UPTT Act on the date of implementation of the Vat Act, will submit the details in prescribed performa alongwith the required annexures UPTT registration certificate within the following periods as under:-
(i) (iii) Application, for endorsement, referred to in subsection (5) of section 17, on the certificate of registration issued under the Uttar Pradesh Trade Tax Act, 1948, shall be presented by the dealer before the registering authority within 60 days from the date of commencement of the Act in form VIII along with annexures, completed in all respects. Every dealer, referred to in sub-section (2) of section 18, for the purpose of retaining registration certificate granted to it under the Uttar Pradesh Trade Tax Act, 1948, shall present an application within 30 days of the commencement of the Act in Form IX along with annexures, completed in all respects before the registering authority. Every dealer, referred to in sub-section (3) of section 18, for the purpose of retaining registration certificate granted to it under the Uttar Pradesh Trade Tax Act, 1948, shall present an application within 30 days from the date of issue of registration certificate to him in Form X along with annexures, completed in all respects before the registering authority. 16. (A) INPUT TAX Input Tax is such tax which has been paid by a registered dealer on the purchases made from within the state from a registered dealer of U.P. only. If purchases of such goods is made from un-registered dealer of U.P. and paid tax on such purchases himself directly to the State Govt., such tax is also called input tax. (B) INPUT TAX CREDIT Every registered dealer, whether Trader or Manufacturer, shall be allowed credit of an amount as input tax credit to the extent and conditions given below in respect of all taxable goods except nonvat goods, capital goods, and captive power plant purchased from within the State of U.P. No input tax credit will be allowed on Central Purchase of goods. (C) TRADERS
(a) The goods have been purchased after the implementation of VAT Act and if. (b) The goods have been re-sold in U.P. outside U.P. or exported out of India, then full amount of input tax credit will be allowed. (c) Input tax credit is also allowable on goods, purchased within six months ending on the date of commencement of VAT Act and such goods are held in opening stock on the date of commencement of VAT Act in the same form and condition in which those were purchased and have suffered levy of tax under the U.P. Trade Tax Act. (d) If such has to be filed before Assessing Authority within 30 days from the date of VAT Act in prescribed format. such goods are transferred outside U.P. as stock transfer or on consignment basis, then partial input tax i.e. over and above the tax as payable on Central Sale against C form will be allowed. (D) MANUFACTURERS (A) If purchased goods are used in manufacturing, processing or packing of (i) Any goods except non-vat goods, and such manufacture goods are exported out of India, or Any taxable goods except non-vat goods and such manufactured, processed or packed goods are sold in U.P., or outside U.P., (B) If purchased goods are used in manufacture of any taxable goods except non-vat goods, and such manufacture goods are transferred outside U.P. as stock transfer or on consignment basis, than partial input tax i.e. over and above the tax as payable on central sale against forms C will be allowed. (C) Input tax credit is also allowable on the goods purchased within 06 months ending on date of commencement of VAT Act and such goods have been used in manufacture of finished or semifinished goods (in the process of manufacture of taxable goods
except non-vat goods) and such finished or semi-finished goods are held in opening stock on the date of VAT Act and such purchased goods have suffered levy of tax under the U.P.T.T. Act. (D) If such manufactured goods are sold in U.P., outside U.P., or exported then full amount of input tax credit will be allowed, and if goods are transferred outside the state of U.P., then partial input tax credit will be allowed. (E) INPUT TAX CREDIT ON CAPITAL GOODS Full amount of input tax shall be allowed to every dealer in respect of capital goods purchased on or after the date on which dealer becomes liable to pay tax under VAT Act, if such goods are to be used in manufacture of any- (i) Taxable goods except non-vat goods and where such manufactured goods are b) Sold in U.P., outside U.P. or exported out of India or c) Transferred or consigned out side U.P., Otherwise than as a result of sale. (F) Exempt goods except non-vat goods and where such manufactured goods are exported out of India. CONTRACTORS Every dealer who is liable to pay tax and opts for payment of tax or lump sum under section 6 of VAT Act in respect of all taxable goods except non-vat goods, capital goods and captive power plant, which are held in stock at the end of period during which section applies, be allowed credit of full amount of input tax in such goods which are used in U.P. (G) DEVELOPER, CO-DEVELOPER & UNITS IN SEZ Credit of full or partial amount of input tax in respect of all taxable goods, may be allowed to developer co-developer and units
established in SEZ for authorized operations subject to such conditions as may be specified. (H) PROPORTIONATE CREDIT OF INPUT TAX Where purchased goods are to be used or disposed of partially for the purpose (re-sale or in manufacturing) the input tax credit shall be claimed and allowed proportionately to the extent they are used or disposed of for the purpose. (I) REVERSE INPUT TAX CREDIT Where a dealer has wrongly claimed input tax credit in respect of any goods, such input tax shall stand reverse and such reverse input tax shall be payable alongwith interest @ 15% per annum. Input Tax Credit on the State Development Tax paid by the dealers:- (A) (B) (C) (D) (E) That under the provisions of section-13 of the Vat Act it is provided that the dealers will be entitled for input tax credit on the goods in closing stock on 31-12-2007, provided the said goods was purchased during the period of 01.07.2007 to 31.12.2007 from the dealers of U.P. and tax was paid under the Erstwhile Act. That the imposition of State Development Tax was provided under section 3-H of the UPTT Act, as such it is clear that the aforesaid Development Tax was paid under the provisions of the erstwhile Act i.e. UPTT Act. That the provisions of rule 19 reads as under:- Deemed rate under this rule shall not include one percent Development Tax paid or payable under section 3H of the Uttar Pradesh Trade Tax Act 1948. That in my opinion the goods which is in the opening stock on 31.12.2007 and the dealers have paid State Development Tax to the suppliers of U.P. for purchasing it, such dealers should be entitled for input tax credit on the amount of State Development Tax paid by them. That it is well established fact of law that if there is contravention under the provisions of a section and a rule in such case the provisions provided under the section shall prevail. Input Tax Credit not to be allowed in certain cases-
(1) No credit of any amount of input tax shall be allowed in respect of goods which- (a) (b) (c) (d) (e) (f) (g) Are brought or received by any dealer from any place outside the State whether such place is situated within the territory of India or outside such territory; have been purchased without payment of tax either under the Uttar Pradesh Trade Tax Act, 1948 or under the Uttar Pradesh Value Added Tax Act, 2007; have been purchased, on any date beyond a period of six months ending on the day preceding the date of the commencement of the Act, by a dealer who is liable for payment of tax with effect from the date of the commencement of the Act; have been purchased, by a dealer who has become liable for payment of tax on any date after the date of the commencement of the Act, on any date before the date on which dealer has become liable for payment of tax, but on or after the date of commencement of the Act and beyond a period of six moths ending on the date preceding the date on which such dealer has become liable to pay tax; have been purchased from within the State, within a period of six months ending on the day preceding the date of the commencement of the Act, by a dealer who is liable for payment of tax with effect from the date of the commencement of the Act but the dealer does not possess purchase invoice issued by the selling registered dealer; have been purchased from within the State, on any date before the date on which dealer has become liable for payment of tax, by a dealer who has become liable for payment of tax on any date after the date of the commencement of the Act but within a period of six months ending on the date preceding the date on which such dealer has become liable to pay tax but dealer does not possess a sale invoice, bearing his name and complete address, issued by the registered selling dealer; have been purchased by a dealer, within a period of six months ending on the day preceding the date of the commencement of the Act, who is liable for payment of tax with effect from the date of the commencement of the Act, from within the State in the circumstances in which such dealer has been liable to pay tax on purchase of such goods, but the dealer, fails to prove that tax has been paid on purchase of such goods under the Uttar Pradesh Trade Tax Act, 1948;
(h) (i) (j) (k) (l) (m) (n) (o) (p) (q) have been purchased within a period of six months ending on the day preceding the date of the commencement of the Act by a dealer who is liable for payment of tax on and from the date of the commencement of the Act and where such goods have not suffered levy of tax under the provisions of the Uttar Pradesh Trade Tax Act, 1948; or have been purchased after issue of Taxpayer s Identification Number but without obtaining tax invoice; have been purchased after obtaining tax invoice but copy of tax invoice, marked as Original is not available and such purchase is not verifiable from the list filed by the selling dealer along with tax return; or have been purchased by a dealer in the period commencing on the date on which such dealer has become liable to pay tax and ending on the date preceding the date on which Taxpayer Identification Number issued to him but the dealer does not possess a sale invoice, issued by selling dealer, bearing name and complete address of such dealer; or are taxable goods, other than non-vat goods, but sale of such goods is not liable to tax in the hands of the purchasing dealer; or are purchased after cancellation of registration certificate of the dealer; or are capital goods within the meaning of clause (e) of section 2 of the Act and such capital goods- (i) have been purchased by a dealer on any date before the date on which he has become liable for payment of tax; have been purchased by a dealer for use or consumption in the manufacture of any exempt goods where such exempt goods are not sold in the course of the export of the goods out of the territory of India; or are capital goods but such goods, for the purpose of section 13, do not fall under the category of capital goods as defined in clause (2) of section 2 ; or are captive power plant or parts, components or accessories of a captive power plant; or are taxable goods mentioned or described in column (2) of Schedule-IV;
(r) (s) (t) (u) (v) (w) (x) (y) (z) (aa) (ab) are capital goods or heavy earth movers used by a dealer in the execution of works contract; are motor vehicles or any other vehicle, used for carriage of passengers or goods or both; or are air coolers, air conditioners, electric fans, heaters, air circulators, water coolers, water purifiers used in factory or workshop where the same are not connected with manufacture or processing, packing of goods for sale by the dealer; are goods used in civil construction work related to office premises or furniture, fittings, office equipments, air coolers, air conditioners, electric fans, heaters, air circulators, water coolers, and water purifiers not connected with manufacturing process; or are parts, components, accessories or consumables which are used for maintenance, repair or running of any goods for which facility of input tax credit is not admissible; or are held by a dealer in opening stock, in the same form and condition in which those were purchased, on the date on which period of composition under section 6 commences; or are goods which have been used or consumed in manufacture or processing of finished goods or semifinished goods or in packing of such finished or semifinished goods held by the dealer in opening stock on the date on which period of composition under section 6 commences; or are held by a dealer in closing stock at the time of discontinuance of business in the same form and condition in which those were purchased; or are goods which have been used or consumed in manufacture or processing of finished or semi-finished goods or in packing of such finished or semi-finished goods held by the dealer in closing stock at the time of discontinuance of business; or are used or consumed in packing of any goods where such goods belong to any other person; or are used or consumed in manufacture or processing of goods or in packing of such manufactured or processed goods where such goods are manufactured or processed or packed for any other person; or
(ac) (ad) (ae) (af) (ag) (ah) (ai) (aj) (ak) (al) are used or consumed in the manufacture or processing of any taxable goods other than non-vat goods or in packing of such manufactured or processed goods or any other goods where sale of the manufactured or processed goods or such other goods is not liable to tax in the hands of the purchasing dealer; or have been re-sold during the period of composition under section 6 ; or have been used or consumed in manufacture or processing of goods and such manufactured or processed goods have been sold in the period of composition under section 6 ; or are gifted or otherwise distributed free of cost or lost, destroyed or stolen; or are used or consumed in manufacture or processing of any goods or packing of such manufactured or processed goods and such manufactured or processed goods are gifted or otherwise distributed free of cost or lost, destroyed or stolen; or are returned to selling dealer within a period of six months from the date of purchase; or are used in packing of any exempt goods and such exempt goods are not sold in the course of export of the goods out of the territory of India; or are used in manufacture or processing of any exempt goods or in packing of such manufactured or processed goods and such manufactured, processed or packed goods are disposed of in any manner other than by way of sale in the course of the export of the goods out of territory of India; or are used or consumed in manufacture or processing of any non-vat good or in packing of any non-vat goods; or are any other goods in respect of which or any other circumstances in which any provision of the Act does not permit benefit of input tax credit (2) In respect of goods which are- (a) (b) consigned outside the State otherwise than as a result of a sale in the same form and condition in which those were purchased; or used or consumed in manufacture or processing of any taxable goods or in packing of such goods and such manufactured or processed goods are consigned outside the State otherwise than as a result of a sale, credit of part