Extract of The Rajasthan Finance Bill, 2008 (No. 6 of 2008)
(Presented in State Assembly on 25.2.2008)
AMENDMENT IN THE RAJASTHAN VALUE ADDED TAX ACT, 2003
3. Amendment of section 23, Rajasthan Act No. 4 of 2003.
In section 23 of the Raj. VAT Act, 2003, hereinafter in this chapter referred to as the principal Act, for the existing punctuation mark ".", appearing at the end, the punctuation mark ":" shall be substituted and thereafter the following proviso shall be added, namely:
"Provided that where a dealer so opts in the prescribed manner, he shall not be deemed to have been assessed under this section.".
4. Amendment of section 24, Rajasthan Act No. 4 of 2003.
After the existing sub-section (4) of section 24 of the principal Act, the following sub-section shall be added, namely:
"(5) Where a dealer opts under proviso to section 23, or where the State Government so directs by notification in the Official Gazette, a dealer may be assessed annually and no such assessment orders shall be passed after the expiry of two years from the end of the relevant year; however, the Commissioner may for reasons to be recorded in particular case may extend such limit by a period not exceeding six months.".
5. Amendment of section 73, Rajasthan Act No. 4 of 2003.
For the existing sub-section (1) of section 73 of the principal Act, the following shall be substituted, namely:
"(1) Every registered dealer, other than the dealer who has opted for payment of tax under sub-section (2) of section 3 or under section 5 or who files e-returns with prescribed documents or submits returns and documents in soft copy to the assessing authority or the officer authorised by the Commissioner, shall, if his turnover exceeds rupees forty lacs in any year, get his accounts in respect of such year audited by an Accountant within the prescribed period from the end of that year and furnish within the prescribed period the report of such audit in the prescribed form duly signed and verified by such Accountant setting forth such particulars and certificates as may be prescribed.
Explanation.- For the purposes of this section "Accountant" means a Chartered Accountant within the meaning of the Chartered Accountants Act, 1949 (Central Act No. 38 of 1949).".
6. Insertion of section 97A, Rajasthan Act No. 4 of 2003.
After the existing section 97 and before the existing section 98 of the principal Act, the following section shall be inserted and shall be deemed always to have been inserted, namely:
"97A. No refund etc. in case of retrospective exemption.
Notwithstanding anything contained in this Act, where amendment in a Schedule results in exemption from tax or, otherwise tax is exempted under this Act, with retrospective effect, the amount charged or collected by a dealer till the date of such amendment or exemption-
(i) shall be deposited with the State Government; and
(ii) if already deposited, shall not be refunded,
and any input tax credit availed in respect of such amount shall be reversed.".
Statement of Objects and Reasons to the Rajasthan Finance Bill, 2008
As per the existing provisions of the Rajasthan Value Added Tax Act, 2003, there is a scheme of self assessment based on the returns filed by the dealers. In order to provide option to the dealers for annual assessment instead of the assessment for the return period, a proviso is proposed to be inserted in section 23. Simultaneous to this the State Govt. is being empowered to direct for annual assessment of the dealer in appropriate cases and Commissioner is being authorized to extend the period of limitation for annual assessment up to six months. With these objectives in view, a new sub-section (5) is proposed to be added to section 24.
VAT system reposes confidence in the dealers and provides for self assessments on the basis of their returns. However, audit of certain categories of dealers are required to be conducted by Chartered Accountant and audit report is to be submitted as per the provisions of sub-section (1) of section 73. At present dealers who have opted for payment of tax under sub-section (2) of section 3 or under section 5 of the Act, have been excluded from purview of audit. Except these class of dealers all other dealers whose turnover exceeds rupees forty lacs in a year, are required to submit audit report in the specified time. It is proposed to exclude the dealers who files e-returns with prescribed documents or submits returns and documents in soft copy to the Department from the purview of such audit. To achieve this objective, sub-section (1) of section 73 is proposed to be amended.
The Act provides for grant of exemption and reduction in the tax rates with retrospective effect by amending the respective schedules and issuance of notification under the existing provisions. In the public inserest, sometimes retrospective exemption or reduction in tax rates are made but in absence of any specific provisions to ensure that no unjust enrichment accrue to the dealers, it is proposed to insert a new section 97A in the Act. The proposed section would ensure that tax charged or collected during retrospective period by the dealer shall be deposited to the State Government, the tax already deposited shall not be refunded and the claim of input tax credit availed, if any, shall be reversed.
Declaration under S.3, Rajasthan Act No. 23 of 1958, appended to the Rajasthan Finance Bill, presented in the State Assembly on 25.2.2008
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 this bill shall have immediate effect under the said Act.