GUJARAT ORDINANCE NO. 1 OF 2006., Dated the 10th May, 2006.
AN ORDINANCE
further to amend the Gujarat Value Added Tax Act, 2003.
WHEREAS the Legislative Assembly of the State of Gujarat is not in session;
AND WHEREAS the Governor of Gujarat is satisfied that circumstances exist which render it necessary for him to take immediate action to amend the Gujarat Value Added Tax Act, 2003 (Guj.1 of 2005);
NOW, THEREFORE, in exercise of the powers conferred on him by clause (1) of article 213 of the Constitution of India, the Governor of Gujarat is hereby pleased to make and promulgate the following Ordinance, namely:-
1. Short title and commencement.-
(1) This Ordinance may be called the Gujarat Value Added Tax (Second Amendment) Ordinance, 2006.
(2) It shall come into force at once.
2. Guj.1 of 2005 to be temporarily amended.- During the period of operation of this Ordinance, the Gujarat Value Added Tax Act, 2003 (Guj.1 of 2005) ( hereinafter referred to as "the principal Act" shall have effect subject to the amendments specified in sections 3 to 10.
3. Amendment of section 2 of Guj. 1 of 2005.- In the principal Act, in section 2, in clause (27), for the words and figures "section 14" the words, figures and letters "section 14, 14A, 14B or 14C" shall be substituted.
4. Amendment of section 9 of Guj. 1 of 2005.- In the principal Act, in section 9, after sub-section (3), the following sub-section shall be added, namely:-
"(4) Where a dealer or a Commission Agent who is liable to pay tax under this Act purchases taxable goods from a Commission Agent to whom permission to pay lump sum tax is granted under section 14B and the goods so purchased by him are not resold within the State, then such dealer or the Commission Agent shall be liable to pay purchase tax on the turnover of such purchases at the rate set out against each of such goods in Schedule II.".
5. Amendment of section 14 of Guj. 1 of 2005.- In the principal Act, in section 14, in sub-section (1),-
(1) in clause (a), in the proviso, clause (vii) shall be deleted;
(2) in clause (b), for the words, brackets and figures clauses (i) to (vii), the words, brackets and figures "clauses (i) to (vi)" shall be substituted.
6. Insertion of new sections 14B and 14C in Guj.1 of 2005.- In the principal Act, after section 14A, the following sections shall be inserted, namely:-
"14B. Composition of tax on agricultural produce. (1) Notwithstanding anything contained in this Act, the Commissioner may, in such circumstances and subject to such conditions as may be prescribed, permit a Commission Agent engaged in the business of agricultural produce, to pay at his option in lieu of the amount of tax leviable from him under this Act, a lump sum tax by way of composition at such rate as may be fixed by the State Government by notification in the Official Gazette.
(2) The permission to pay lump sum tax under sub-section (1) shall be granted by the Commissioner to a Commission Agent who, -
(a) exclusively carries on a business of agricultural produce, and
(b) is licensed as general commission agent with a market committee established under the Gujarat Agricultural Produce Markets Act, 1963(Guj. 20 of 1964).
(3) The Commissioner shall not grant permission to pay lump sum tax under sub-section (1) to a Commission agent who,-
(a) sells the goods in the course of inter-State trade and commerce or exports goods out of the territory of India,
(b) purchases the goods in the course of inter-State trade and commerce or imports goods from a place out of the territory of India,
(c) dispatches the goods to his branch or his consigning agent out side the State or receives the goods from his branch situate out side the State or from consigning agent out side the State,
(d) sells the goods to a person who is not a registered dealer, or
(e) sells the goods to a dealer who is permitted to pay lump sum tax under section 14.
(4) The commission agent who is permitted under sub-section (1) to pay lump sum tax shall not,-
(a) be entitled to claim tax credit in respect of tax paid by him on his purchases,
(b) charge any tax under this Act in his sales bill or sales invoices in respect of the sales on which lump sum tax is payable, and
(c) issue tax invoice to any dealer who has purchased the goods from him.
(5) The commission agent who is permitted to pay lump sum tax under sub-section (1) shall be liable to pay purchase tax leviable under subsections (1), (3) and (4) of section 9 in addition to the lump-sum tax under this section.
(6) The permission granted under sub- section (1) shall remain valid so long as the provisions of this section and rules made in this behalf are complied with; and in case of breach of any of the provisions of this section or rules, the commission agent shall be liable to pay tax under sections 7 and 9 for such tax period as may be prescribed.
14C. Composition of tax on turnover of right to use the goods. (1) The Commissioner may, in such circumstances and subject to such conditions as may be prescribed, permit a dealer referred to in subclause (h) of clause (10) of section 2, to pay at his option in lieu of amount of tax leviable from him under this Act, a lump sum tax by way of composition at the rate as may be fixed by the State Government by notification in the Official Gazette.
(2) The provisions of sub-sections (4) and (5) of section 14B shall apply mutatis-mutandis to a dealer who is permitted under sub-section (1) to pay lump sum tax by way of composition.
(3) The permission granted under sub-section (1) shall remain valid so long as the provisions of this section and rules made in this behalf are complied with. In case of breach of any of the provisions, the dealer shall be liable to pay tax under sections 7 and 9 for such tax period as may be prescribed.
7. Amendment of section 41 of Guj.1 of 2005.- In the principal Act, in section 41, in sub-section (1), for the words "inequitable situation", the words "inequitable situation or for sufficient and reasonable cause" shall be substituted.
8. Amendment of section 60 of Guj.1 of 2005.- In the principal Act, in section 60,-
(1) in sub-section (1), in clause (b), for the word and figures "section 14", the words, figures and letters "sections 14, 14B and 14C" shall be substituted;
(2) in the proviso,-
(i) in clause (c), the word "or" appearing at the end shall be deleted;
(ii) in clause (d), the word " or" shall be added at the end;
(iii) after clause (d), the following clause shall be added, namely:-
" (e) in such other cases as the State Government may by notification in the Official Gazette, specify."
9. Amendment of section 64 of Guj.1 of 2005.- In the principal Act, in section 64,-
(1) for the words "eight years", the words "six years" shall be substituted;
(2) the following proviso shall be added, namely:-
" Provided that where the dealer is a party to an appeal or revision under this Act, he shall preserve the books of accounts and the records pertaining to the subject matter of such appeal or revision until the appeal or revision is finally disposed of."
10. Amendment of section 98 of Guj. 1 of 2005.- In the principal Act, in section 98, after sub-section (2), the following sub-section shall be inserted, namely:-
" (2A) Any rule made under the Act, may be made so as to have retrospective effect.".
STATEMENT
The Gujarat Value Added Tax Act, 2003 (Guj.1 of 2005) is being implemented in the State with effect from 1st April, 2006. Representations were received by the Government from traders and businessmen to remove the difficulties and hardship caused in the implementation of the Act. The State Government have considered such representations and accordingly it is considered necessary to amend the Act so as to provide for the following matters:-
(i) Under the provisions of section 14, a dealer who has been permitted to pay lump sum tax cannot effect sale or purchase with another dealer who is permitted to pay lump sum tax. This restriction has been removed.
(ii) It is proposed to insert new section 14B so as to permit a commission agent who is engaged in the business of agricultural produce to pay lump sum tax.
(iii) It is also proposed to insert new sub-section (4), in section 9 to impose liability of purchase tax on purchasing dealer in case where the agricultural produce purchased from commission agent has not been resold within the State.
(iv) A dealer who is engaged in the business of transferring the right to use the goods is also permitted to pay lump sum tax by inserting new section 14C.
(v) It is proposed to amend section 41 of the Act so as to grant remission of tax, penalty or interest also in cases where there is sufficient and reasonable cause.
(vi) Section 64 provides that the books of accounts shall be preserved for a period of eight years. It is proposed to reduce the time limit from eight years to six years except in the cases where an appeal or revision is pending.
(vii) In order to enable the State Government to frame rules, where necessary, with retrospective effect, the power has been taken by inserting new subsection (2A) in section 98.
As the Legislative Assembly of the State of Gujarat is not in session, this Ordinance is promulgated to amend the said Act to achieve the aforesaid objects.