EXTRACT OF RAJASTHAN FINANCE BILL 2006

Bill No. 5 of 2006

(Authorized English Version)

THE RAJASTHAN FINANCE BILL, 2006

(to be introduced in the Rajasthan Legislative Assembly)

A

Bill

further to amend the Rajasthan Sales Tax Act, 1994, the Rajasthan Value Added Sales Tax Act, 2003, the Rajasthan Motor Vehicles Taxation Act, 1951, the Rajasthan Stamp Act, 1998, to repeal the Rajasthan Video Films (Regulation of Exhibition) Act, 1990 and to provide for levy of tax on land in the State of Rajasthan, in order to give effect to the financial proposals of the State Government for financial year 2006-07 and to make certain other provisions.

Be it enacted by the Rajasthan State Legislature in the Fifty-seventh Year of the Republic of India, as follows:-

CHAPTER I

PRELIMINARY

1. Short title.-

(1) This Act may be called the Rajasthan Finance Act, 2006.

2. Declaration under section 3, Rajasthan Act No. 23 of 1958.-

In pursuance of section 3 of the Rajasthan Provisional Collection of Taxes Act, 1958 (Act No. 23 of 1958) it is hereby declared that it is expedient in the public interest that provisions of clauses 3 to 36 of this Bill shall have immediate effect under the said Act.

CHAPTER III

AMENDMENT OF THE RAJASTHAN VALUE ADDED SALES TAX ACT, 2003

4. Amendment of the title, Rajasthan Act No. 4 of 2003. -

For the existing title "THE RAJASTHAN VALUE ADDED SALES TAX ACT, 2003" of the Rajasthan Value Added Sales Tax Act, 2003 (Act No. 4 of 2003), hereinafter in the Chapter referred to as the principal Act, the title "THE RAJASTHAN VALUE ADDED TAX ACT, 2003" shall be substituted.

5. Amendment of section 1, Rajasthan Act No. 4 of 2003. -

In subsection (1) of section 1 of the principal Act, for the existing expression "The Rajasthan Value Added Sales Tax Act, 2003" the expression "The Rajasthan Value Added Tax Act, 2003" shall be substituted.

6. Amendment of section 2, Rajasthan Act No. 4 of 2003. -

In section 2 of the principal Act,-

(i) for the existing clause (7), the following clause shall be substituted, namely:-

"(7) "capital goods" means plant and machinery including parts and accessories thereof, meant for use in manufacture unless otherwise notified by the State Government from time to time in the Official Gazette;";

(ii) after the existing clause (36) and before clause (37), the following new clauses shall be inserted, namely.-

"(36A) "Schedule" means a Schedule appended to this Act;

(36B) "Special Economic Zone" shall have the same meaning as has been assigned to it in clause (za) of section 2 of the Special Economic Zones Act, 2005 (Central Act No. 28 of 2005);"; and

(iii) in the existing clause (41), after the existing expression "sub-section (2) of section 4" and before the punctuation mark ";" the expression "but shall exclude the sale price or part of sale price, if any, in respect of sales of goods which were purchased in the State by the dealer upon payment of tax on the maximum retail price of such goods or, where tax on maximum retail price of such goods were paid in the State on an earlier occasion" shall be inserted.

7. Amendment of section 3, Rajasthan Act No. 4 of 2003. -

In subsection (2) of section 3 of the principal Act, for the existing expression "enumerated in clause (b) of sub-section (1), whose turnover in a year does not exceed rupees twenty five lacs and who purchases goods from a registered dealer may opt for", the expression "enumerated in clause (b) of sub-section (1), whose turnover in a year does not exceed rupees fifty lacs and who purchases goods from a registered dealer of the State may opt for" shall be substituted.

8.Amendment of section 4, Rajasthan Act No. 4 of 2003. -

For the existing section 4 of the principal Act, the following shall be substituted, namely. -

"4. Levy of tax and its rate. -

(1) Subject to the other provisions of this Act and the provisions of the Central Sales Tax Act, 1956 (Central Act No. 74 of 1956), the tax payable by a dealer under this Act, shall be at such point or points, as may be prescribed, in the series of sales by successive dealers and shall be levied on the taxable turnover of sale of goods specified in Schedule III to Schedule VI at the rate mentioned against each of such goods in the said Schedules.

(2) Every dealer who in the course of his business purchases any good other than exempted goods in the circumstances in which no tax under sub-section (1) is payable on the sale price of such goods and the goods are disposed off for the purpose other than those specified in clause (a) to (g) of sub-section (1) of section 18, shall be liable to pay tax on the purchase price of such goods at the rate mentioned against each of such goods in Schedule-III to Schedule VI of the Act.

(3) Notwithstanding anything contained in sub-section (1), the tax payable by the dealer covered by sub-section (2) of section 3, shall be levied at the rate not exceeding two percent on the turnover, as may be notified by the State Government.

(4) Where any goods are sold packed in some material, whether charged for separately or not, notwithstanding anything contained in sub-section (1), the tax liability of and the rate of tax on the packing material shall be according to the tax liability of and the rate of tax on the goods packed therein.

(5) Subject to such conditions as it may impose, the State Government may, if it considers necessary so to do in the public interest, by notification in the Official Gazette, add to or omit from, or otherwise amend or modify the Schedules, prospectively or retrospectively, or reduce the rate of tax payable in respect of any goods and thereupon the Schedule shall be deemed to have been amended accordingly.

(6) Every notification issued under sub-section (5) shall be laid, as soon as may be after it is so issued, before the House of the State Legislature, while it is in session for period of not less than thirty days which may comprised in one session or in two successive sessions and is before the expiry of the sessions in which it is so laid or of the session immediately following the House of the State Legislature makes any modification in such notification or resolves that any such notification should not be issued, such notification thereafter have effect only in such modified form or be of no effect, as the case may be, so however, that any such modification or annulment shall be without prejudice to the validity of any thing previously done thereunder.

(7) Notwithstanding anything contained in this Act, any registered dealer, who imports into, or manufactures in, the State such goods as may be notified by the State Government, may, at his option, pay, in lieu of the tax payable by him on sale price of such goods under this Act, a tax at full rate on the maximum retail price of such goods in the manner as may be prescribed:

Provided that where a dealer has purchased any goods -

(a) from aforesaid importer or manufacturer upon payment of tax on the maximum retail price of such goods; or

(b) from another registered dealer where tax on the maximum retail price of such goods was paid in the State on an earlier occasion,

the purchasing dealer, irrespective of whether he is registered or not, while making resale of such goods in the State, shall, notwithstanding anything contained elsewhere in the Act, be entitled to recover from the buyer the amount of tax paid by him at the time of purchase of such goods under such conditions and restrictions, and in such manner, and within such time, as may be prescribed.".

9. Amendment of section 8, Rajasthan Act No. 4 of 2003. -

For the existing section 8 of the principal Act, the following shall be substituted, namely: -

"8. Exemption of tax. -

(1) The goods specified in the Schedule-I shall be exempt from tax, subject to such conditions as may be specified therein.

(2) Subject to such conditions as it may impose, the State Government may, if it considers necessary so to do in the public interest, by notification in the Official Gazette, add to or omit from, or otherwise amend or modify the Schedule-I, prospectively or retrospectively, and thereupon the Schedule shall be deemed to have been amended accordingly.

(3)The State Government in the public interest, by notification in the Official Gazette, may exempt whether prospectively or retrospectively from tax the sale or purchase by any person or class of persons as mentioned in Schedule-II, without any condition or with such condition as may be specified in the notification.

(4) The State Government may, if it considers necessary in the public interest so to do, notify grant of exemption from payment of whole of tax payable under this Act in respect of any class of sales or purchases for the purpose of promoting the scheme of Special Economic Zones or promoting exports, subject to such conditions as may be laid down in the notification.

(5) Every notification issued under sub-section (4) shall be laid, as soon as may be after it is so issued, before the House of the State Legislature, while it is in session for a period of not less than thirty days, which may comprised in one session or in two successive sessions and is before the expiry of the sessions in which it is so laid or of the session immediately following the House of the State Legislature makes any modification in such notification or resolves that any such notification should not be issued, such notification thereafter have effect only in such modified form or be of no effect, as the case may be, so however, that any such modification or annulment shall be without prejudice to the validity of any thing previously done thereunder.".

10. Amendment of section 13, Rajasthan Act No. 4 of 2003. -

In the existing sub-section (3) of section 13 of the principal Act, after the existing expression, "the assessing authority of such dealer." appearing at the end, the expression "Where a decision on the grant of permission is not accorded within a period of sixty days from the date of the application seeking change of assessing authority, such permission shall be deemed to have been granted." shall be added.

11. Amendment of section 15, Rajasthan Act No. 4 of 2003. -

In section 15 of the principal Act, -

(i) in sub-section (2) for the existing expression " security in the form of National Savings Certificate or in cash,", the expression "security in the form of National Saving Certificate or in cash or in the form of three years bank guarantee of a nationalized bank," shall be substituted;

(ii) in sub-section (2), for the existing clauses (a) and (b), the following shall be substituted, namely: -

"(a) Rs. 10,000/- in case of a small scale manufacturing unit, Rs. 15,000/- in case of a medium scale manufacturing unit and Rs. 25,000/- in case of a large scale manufacturing unit; and

(b) Rs. 10,000/- in cases not covered by clause (a)."; and

(iii) ) in sub-section (3) of section 15, for the existing expression "in the form of National Saving Certificate or in cash, of the amount of Rs. 25,000/-.", the expression "in the form of National Saving Certificate or in cash or in the form of three years bank guarantee of a nationalized bank, of the amount of Rs. 10,000/-." shall be substituted.

12. Amendment of Section 17, Rajasthan Act No. 4 of 2003.-

In sub-section (2) of section 17 of the principal Act, for the existing expression " however, the Commissioner, in particular cases, may after recording reasons, grant such refunds earlier also.", The expression "however the Commissioner after recording reasons for doing so may, by a general or specific order, direct to grant such refunds even earlier." shall be substituted.

13. Amendment of Section 18, Rajasthan Act No. 4 of 2003.-

In clause (v) of sub-section (3) of section 18 of the principal Act, the existing expression "by producing the selling dealer or otherwise" shall be deleted.

14. Substitution of Section 19, Rajasthan Act No. 4 of 2003.-

For the existing section 19 of the principal Act, the following shall be substituted, namely.-

"19. Input tax credit for stock on the date of commencement of this Act.-

Input tax credit shall be allowed on the goods other than capital goods, which had suffered tax under the repealed Act, and are lying in stock of the dealer on the date of commencement of this Act, provided that such dealer has submitted the details of such stock, as required by the Commissioner under section 93 of the repealed Act or section 91 of this Act, and such goods in stock are used for the purposes specified in clauses (a) to (f) of sub-section (1) of section 18. However, the input tax credit under this section shall be allowed to the extent of the tax paid under the repealed Act or the amount of tax payable on such goods under this Act, whichever is less."

15. Amendment of section 23, Rajasthan Act No. 4 of 2003. -

In section 23 of the principal Act, after the expression "to which it relates" and before the punctuation mark "." the expression "and a list of such registered dealers so assessed may be published through electronic or print media and such publication shall be deemed to be due intimation to such dealers wherever required" shall be inserted.

16. Amendment of section 53, Rajasthan Act No. 4 of 2003. -

In section 53 of the principal Act, -

(i) in sub-section (4), for the existing expression " interest with effect from the date it becomes due" the expression "interest with effect from the date of its deposit" shall be substituted; and

(ii) after the existing sub-section (5), the following new subsection shall be added, namely.-

"(6) Where tax is collected on any official or personal purchase by Foreign Diplomatic Missions or their Diplomats or by UN Bodies or their Diplomats, it shall be refunded to such person or Mission or Bodies, as the case may be, within thirty days of the receipt of the application, by such officer as may be authorised by the State Government in this behalf by notification."

17. Amendment of section 56, Rajasthan Act No. 4 of 2003. -

In section 56 of the principal Act, for the existing expression "a sum of rupees two thousand for first thirty days and thereafter in case of continued default a further penalty of rupees twenty for every day of such default.", the expression "a sum not exceeding one thousand rupees." shall be substituted.

18. Amendment of section 57, Rajasthan Act No. 4 of 2003. -

In section 57 of the principal Act, for the existing expression "a sum of rupees two thousand and further penalty of rupees fifty for every day", the expression "a sum not exceeding rupees two thousand and a further penalty of rupees twenty five for every day" shall be substituted.

19. Amendment of section 58, Rajasthan Act No. 4 of 2003.-

In section 58 of the Principal Act, for the existing clause (i) and (ii), the following shall be substituted, namely:-

"(i) in case the dealer is required to pay tax every month under section 20, a sum equal to rupees ten per day for the period during which the default in furnishing such return continues, but not exceeding in the aggregate twenty percent of the tax so assessed; and

(ii) in all other cases, a sum equal to rupees five per day subject to a maximum limit of rupees five hundred, for the period during which the default in furnishing of such return continues.".

20. Amendment of section 59, Rajasthan Act No. 4 of 2003. -

In section 59 of the principal act, for the existing expression "a sum of rupees five thousand and in case of continuing default a further penalty of one hundred rupees for every day of such continuance.", the expression "a sum not exceeding rupees five thousand and in case of continuing default a further penalty of rupees fifty for every day of such continuance." shall be substituted.

21. Amendment of section 62, Rajasthan Act No. 4 of 2003.-

In section 62 of the principal Act, for the existing expression "shall pay by way of penalty, a sum of rupees one thousand.", the expression "shall pay by way of penalty, a sum not exceeding rupees one thousand." shall be substituted.

22. Amendment of section 63, Rajasthan Act No. 4 of 2003. -

In sub section (1) of section 63 of the principal Act, for the existing expression "which shall be twenty percent of the amount of tax required to be deducted in case of non-deduction, and a penalty at the rate of three percent per month on the amount so deducted", the expression "which may extend upto rupees one thousand in the case of non-deduction, and a penalty at the rate of two percent per month on the amount so deducted" shall be substituted.

23. Amendment of Section 64, Rajasthan Act No. 4 of 2003.-

In section 64 of the principal Act, for the existing expression "shall pay by way of penalty a sum of rupees two thousand, and in case of a continuing default, a further penalty of rupees fifty for every day of such continuance.", the expression "shall pay by way of penalty a sum not exceeding rupees two thousand, and in case of a continuing default, a further penalty of rupees twenty five for every day of such continuance." shall be substituted.

24. Amendment of Section 67, Rajasthan Act No. 4 of 2003.-

In sub-section (1) of section 67 of the principal Act, for the existing expression "sanction from the Deputy Commissioner (Administration) having jurisdiction, he shall, on conviction by a Judicial Magistrate having jurisdiction, be punishable with simple imprisonment which may extend to three years or with fine which may extend to rupees ten thousand or both.

However, for the offences covered under clauses (b), (c), (f), (g), and (i) he shall on conviction be punishable with a minimum sentence of simple imprisonment of twelve months but in appropriate cases the court may award a sentence less than twelve months." the expression "sanction from the Commissioner, he shall, on conviction by a Judicial Magistrate having jurisdiction, be punishable with simple imprisonment for a term which may extend to six months and with fine not exceeding rupees five thousand, and for the offences covered under clauses (b), (c), (f), (g), and (i) with a minimum sentence of simple imprisonment of three months." shall be substituted.

25. Amendment of section 68, Rajasthan Act No. 4 of 2003. -

In section 68 of the principal Act, -

(i) in sub-section (2), for the existing expression "a sum equal to one and a half times of" the expression "a sum equal to" shall be substituted; and

(ii) for the existing sub-section (3), the following shall be substituted, namely:-

"(3) Notwithstanding anything contained in sub-sections (1) and (2), on an application by a person admitting the offence committed by him under sub-section (8) of section 75 or under sub-section (6) or (9) or (11) of section 76, the officer empowered under sub-section (4) of section 75 or Incharge of a check-post, as the case may be, may accept composition money from such person in lieu of penalty or prosecution, which shall be,-

(a) in case of offence committed under sub-section (8) of section 75 or sub-section (6) of section 76, equal to the amount of four times of the tax leviable on the goods involved or twenty five percent of the value of such goods, whichever is less;

(b) in case of offence committed by him under subsection (9) of section 76, equal to fifteen percent of the value of the goods;

(c) in case of offence committed under sub-section (11) of section 76, equal to twenty five percent of the value of such goods.".

26. Amendment of section 75, Rajasthan Act No. 4 of 2003. -

In sub-section (8) of section 75 of the principal Act, for the existing expression "a penalty equal to thirty percent of the value of such goods" the expression "a penalty equal to the amount of five times of the tax leviable on such goods or thirty percent of the value of such goods, whichever is less" shall be substituted.

27. Amendment of section 76, Rajasthan Act No. 4 of 2003. -

In section 76 of the principal Act, -

(i) in sub-section (4), for the existing expression "an officer empowered by the State Government' the expression "an officer authorized by the Commissioner, shall be substituted;

(ii) the existing sub-section (11) and (12) shall be re- numbered as sub-section (12) and (13);

(iii) after the existing sub-section (10) and before the renumbered sub-section (12), the following new sub-section shall be inserted, namely.-

"(11) Notwithstanding anything contained in this section, where the driver or the person Incharge of the vehicle or the carrier abstains from bringing or stopping the vehicle or carrier at the nearest check-post as provided under clause (a) of subsection (2), the Incharge of the check-post or the officer empowered under sub-section (4) may detain such vehicle or carrier and, after affording an opportunity of being heard to the owner or a person duly authorised by such owner or the driver or the person Incharge of the vehicle or carrier, may impose a penalty equal to fifty percent of the value of such goods." and

(iv) in the re-numbered sub-section (12), for the existing expression "with forged documents," the expression "with false or forged documents," shall be substituted.

28. Amendment of section 77, Rajasthan Act No. 4 of 2003. -

For the existing section 77 of the principal Act, the following shall be substituted, namely:-

"77. Establishment of check-post on contract basis.-

(1) Where the State Government is of the opinion that without establishing a departmental check-post, it is in the public interest to collect tax on contract basis in respect of all kinds of building stones marble and granite in all their forms, gitti, bazari, all other goods specified under clause (8) of section 2 and livestock at a particular check-post or for a specified area, it may direct the Commissioner to collect such tax through a contract at such check-post or for such area, at the rates as may be notified under the Act from time to time in the manner and on such terms and conditions as may be prescribed, for a period not exceeding two years at a time.

Explanation.- For the purposes of this section any transaction involving buying, supplying, distributing, carrying or otherwise disposal of the goods or the livestock referred to above, shall be construed to be sale.

(2) A contactor covered by sub-section (1), shall deposit the entire amount of tax collected subject to revision on account of any increase or decrease in the rate of tax or grant of exemption from tax, in such manner and within such time as may be prescribed, and all the provisions of this Act including the provisions of recovery and interest shall, so far as may be, apply to such contractor.

(3) Where the period of a contact entered into sub-section (1) expires and no further contract is awarded, the same contract may be extended by the Commissioner, for a further period of three months or up to the date of the award of the next contract, whichever is earlier, and the extended period shall be governed by the terms and conditions of the original contract.

(4) The contractor shall not collect tax on the goods under sub-section (1) exceeding the amount of tax leviable thereon under the provisions of this Act.

(5) Where a contractor violates the provisions of subsection (4), the Commissioner or any officer not below the rank of Assistant Commercial Taxes Officer authorized by the Commissioner, shall, after affording an opportunity of being heard, direct that such contractor shall pay by way of penalty, in addition to the amount of excess tax collected, a sum equal to double the amount of excess tax collected by him or any other person on his behalf.

(6) Where a contractor violates any of the terms or conditions of the contract, the Commissioner may after affording opportunity of being heard and recording reasons in writing, terminate the contract at any time and shall be empowered to recover the full amount of tax as stipulated under the contract from such contractor, as if such amount was a demand of tax under this Act."

29. Amendment of Section 80, Rajasthan Act No. 4 of 2003. -

In section 80 of the principal Act,-

(i) in the marginal heading, for the existing expression "obtain licence" the expression "obtain certificate" shall be substituted; and

(ii) in sub-section (1), for the existing expression "shall obtain a licence" the expression "shall obtain a certificate" shall be substituted.

30. Amendment of section 83, Rajasthan Act No. 4 of 2003.-

In subsection (1) of section 83 of the principal Act,-

(i) for the existing clause (a), the following shall be substituted, namely.-

"(a) an order passed by the Commissioner under subsection (2) of section 26, section 36, section 77 or section 85;";

(ii) for the existing clause (b), the following shall be substituted, namely.-

"(b) an order passed under the Act by the Deputy Commissioner (Administration);";

(iii) in the existing clause (c), for the existing expression "appellate authority." the expression "appellate authority; and" shall be substituted; and

(iv) after clause (c), so amended, the following new clause shall be inserted.-

"(d) an order of the State Level Screening Committee or the District Level Screening Committee passed under the Incentive, Exemption or Deferment Schemes notified under section 8 or under sub-section (3) of section 20 of the Act.".

31. Insertion of Schedule I, II, III, IV, V and VI, Rajasthan Act No. 4 of 2003.-

After the existing section 100 of the principal Act, the following Schedules shall be inserted, namely:-

"SCHEDULE I

[See sub-section (1) of section 8]

Goods, the Sales or Purchase of which are Exempt From Tax

SCHEDULE II

[See sub-section (3) of section 8]

Exemption to Persons or Class of Person

SCHEDULE III

[See section 4]

Goods Taxable at 1%

SCHEDULE IV

[See section 4]

Goods Taxable at 4%

SCHEDULE V

[See section 4]

Goods Taxable at 12.5%

SCHEDULE VI

[See section 4]

Goods Taxable at 20% and above