GOVERNMENT OF ANDHRA PRADESH

COMMERCIAL TAXES DEPARTMENT

PROCEEDINGS OF THE

AUTHORITY FOR CLARIFICATION AND ADVANCE RULING

(Under Section 67 of APVAT Act, 2005)

Present: Sri G. Lakshmi Prasad, Addl. Commissioner (Policy)

Dr. K. Raghavaiah, Jt. Commissioner (Audit - II )

Sri. D.Venkateswara Rao, Jt. Commissioner ( Legal)

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A.R.Com/ 10 /2009. Dated : 30th July, 2009.

Ref:- CCT's.Ref.No: PMT/P&L/A.R.Com/2005, Dated 13-04-2005.

O R D E R:

I. M/s Sri Raghavendra Enterprises, Vanasthalipuram, Hyderabad,(TIN 28762137467) have filed an application and sought clarification and advance ruling on the following items under Section 67 of APVAT Act, 2005 read with Rule 66(2)(i) of APVAT Rules, 2005 along with the application fee of Rs.1,000/-

II. They sought clarification on the following:

Rate of tax on food items in running of Canteen at Sampurna Theatre, Vanasthalipuram, in lieu of Amendment of Sec. 9 of APVAT Act, in G.O.Ms.No. 175, Revenue, Dept. dt. 18.02.2009, and whether they are eligible for claiming of Input Tax Credit.

III. The applicant submitted the following documents:

Write up on the issue.

IV. Mr. N.V.Ramana Murthy, appeared for hearing and explained the case.

V. The issue has been examined with reference to the provisions of the APVAT Act and Rules and HSN Codes notified by Government vide G.O.Ms.No:398, Revenue (CT.II) Department Dated 31-03-2005 and G.O.Ms.No:490, Revenue (CT.II) Department Dated 15-04-2005 as superceded in G.O.Ms.No.1596, Revenue(CT-II) Dept. dt.27.08.2005, in G.O.Ms.No.1615, Revenue (CT-II), Dept. dt.31.08.2005, G.O.Ms.No.502, Rev. (CT-II) Dept., dt.1-5-2006 w.e.f. 1-5-2006, G.O.Ms.No.656, Revenue (CT-II), Dept. dt.2.06.2006 G.O.Ms.No.795, Revenue (CT-II), Dept. dt.29.06.2006 and the G.O.s issued till date and ruling is given as under:

VI. The applicant is running a Canteen at Sampurna Theatre premises, Vanasthalipuram, and sought the rate of tax applicable to them in lieu of Amendment of Sec. 9 of APVAT Act, in G.O.Ms.No. 175, Revenue, Dept. dt. 18.02.2009, and requested to know whether they are eligible for claiming of Input Tax Credit, or not.

VII. The ruling is that, under clause (d) of sub section (9) of Section 4 of the APVAT Act every dealer running a restaurant, sweet stall, or any other eating house and whose total turnover is more than Rs. Five lakhs and less than Rs. One crore fifty lakhs per annum is liable to pay tax at 4% on his taxable turnover.

The dealers who are liable to pay tax under clause (d) of sub section (9) of Section 4 of the APVAT Act are not eligible to claim input tax credit in view of the prohibition contained in clause (h) of sub section (5) of Section 13 of the APVAT Act.

NOTE:- An appeal against this proceedings can be filed before the Sales Tax Appellate Tribunal, A.P. Hyderabad within 30 days of this ruling.

Addl/Jt.Commissioner