The following Act of the Kerala State Legislature is hereby published for general information. The Bill as passed by the Legislative Assembly received the assent of the Governor on the 28th day of July, 2010.
By order of the Governor,
K. MADHUSUDANAN NAIR,
ACT 10 of 2010
EXTRACT OF THE KERALA FINANCE ACT, 2010
An Act to give effect to certain financial proposals of the Government of Kerala for the Financial Year 2010-2011.
Preamble.-
WHEREAS, it is expedient to give effect to certain financial proposals of the Government of Kerala for the Financial Year 2010-
BE it enacted in the Sixty-first Year of the Republic of India as follows:-
1. Short title and commencement.-
This Act may be called the Kerala Finance Act, 2010.
(2) Save as otherwise provided in this Act,-
(a) sub-clauses (i), (iii) and (iv) of clause (b) and sub-clauses (i) and (ii) of clause (c) of sub-section (21) of section 8 shall be deemed to have come into force on the 1st day of April, 2005;
(b) sub-clause (iii) of clause (c) of sub-section (21) of section 8 shall be deemed to have come into force on the 1st day of April, 2007;
(c) clause (i) of sub-section (3) of section 4 and clause (ii) of sub-section (10) of section 8 shall be deemed to have come into force on the 1st day of April, 2008;
(d) clause (i) of sub-section (4) of section 4 shall be deemed to have come into force on the 1st day of April, 2009;
(e) sub-clause (iv) of clause (a) and sub-clause (viii) of clause (b) of sub-section (21) of section 8 shall be deemed to have come into force on the 18th day of September, 2009 ;
(f) clause (iv) of sub-section (4) of section 8 shall be deemed to have come into force on the 13th day of November, 2009;
(g) clause (ix) of sub-section (3) of section 3; item (r) in serial number 3 (i) of clause (i) and clause (ii) of sub-section (3) of section 5; clause (iii) of sub-section (2) of section 6; and section 9 shall come into force at once; and
(h) the remaining provisions of this Act shall be deemed to have come into force on the 1st day of April, 2010.
8. Amendment of Act 30 of 2004.-
In the Kerala Value Added Tax Act, 2003 (30 of 2004),-
(1) in section 2,-
(i) after clause (vi), the following clause shall be inserted, namely:-
"(vi a) "Assistant Commissioner (Appeals)" means any person appointed to be an Assistant Commissioner (Appeals) under sub-section (3) of section 3."
(ii) after clause (xvi), the following clause shall be inserted, namely:-
"(xvii) "Deputy Commissioner (Appeals)" means any person appointed to be a Deputy Commissioner (Appeals) under sub-section (3) of section 3."
(iii) in clause (liiA), after the words "subsequent to the registration" the words "or which had already been subjected to tax under this Act" shall be inserted ;
(2) in section 3,-
(i) in sub-section (3), after the words "Deputy Commissioners" the words and brackets "Deputy Commissioner (Appeals), Assistant Commissioner (Appeals)" shall be inserted ;
(ii) to sub-section (4), the following proviso shall be inserted, namely:-
"Provided that no such orders, instructions or directions shall be given so as to interfere with the discretion of the Deputy Commissioner (Appeals) and Assistant Commissioner (Appeals) in the exercise of their appellate functions."
(3) in section 6,-
(i) in sub-section (1), for the fifth proviso, the following proviso shall be substituted, namely:-
"Provided also that where,
(a) the sale is to or by Military, Naval, Air Force or National Cadet Corps Canteen, Indian Naval Canteen Service and Canteen Stores Department ; and
(b) in case of motor vehicles, the sale is to Defence personnel or ex-service men on production of authorisation duly issued by the authorised officer of the Canteen Stores Department,
the tax payable under clauses (a) or (d) above shall subject to such conditions and restrictions as may be prescribed, be at half the rate applicable to such goods."
(ii) in sub-section (2), after the existing proviso, the following proviso shall be inserted, namely:-
"Provided further that Khadi and Village Industrial Units manufacturing splints and veneers shall not be liable to tax under this subsection on the turnover of purchase of softwood effected from unregistered dealers for the years 2005-06 and 2006-07."
(4) in section 8,-
(i) in clause (b),-
(a) in sub-clause (ii), for the letters, figures and words "Rs. 1,50,000 per annum" the letters, figures and words "Rs. 1,40,000 per annum" shall be substituted ;
(b) in sub-clause (iii), for the letters, figures and words "Rs. 3,00,000 per annum" the letters, figures and words "Rs 2,80,000 per annum" shall be substituted;
(c) in sub-clause (iv), for the letters, figures and words "Rs. 10,00,000 per annum" the letters, figures and words "Rs. 15,00,000 per annum" shall be substituted;
(d) for the second proviso, the following proviso shall be substituted, namely:-
"Provided further that notwithstanding anything contained in this clause, dealers with a single crushing machine of size not exceeding 30.48 cm × 22.86 cm shall pay rupees twenty five thousand only per annum and those with a single crushing machine of size above 30.48 cm × 22.86 cm but not exceeding 40.64 cm × 25.40 cm shall pay rupees one lakh only per annum, as tax under this clause."
(ii) in clause (c), in sub-clause (ii), after the existing proviso, the following proviso shall be inserted, namely:-
"Provided further that, where a dealer had paid tax under this sub-clause for the previous year, the tax payable for the succeeding year under this clause shall be one hundred and fifteen per cent of such tax paid during the previous year."
(iii) in clause (f),-
(a) in sub-clause (i),-
(i) in Explanation 6,-
(a) for the figures and symbol "2008-09" wherever they occur, the figures and symbol "2009-10" shall be substituted;
(b) for the figures and symbol "2009-10" wherever they occur, the figures and symbol "2010-11" shall be substituted;
(ii) after Explanation 7, the following Explanation shall be inserted, namely:-
"Explanation 8.- Where a dealer who had opted and paid tax under this clause during previous years with respect to a branch that had remained closed during the whole of the year 2009-10, for the purpose of determining the compounded tax payable for 2010-2011, the tax paid in respect of that branch shall not be reckoned."
(b) for sub-clause (v), the following sub-clause shall be substituted, namely:-
"(v) Where a dealer had paid tax under this clause for the previous year, the tax payable for the succeeding year under this clause shall be,
(a) one hundred and five per cent of such tax paid during the previous year, in case their turnover for the above goods for the preceding year was rupees ten lakhs or below;
(b) one hundred and ten per cent of such tax paid during the previous year, in case their turnover for the above goods for the preceding year was above rupees ten lakhs and up to rupees forty lakhs;
(c) one hundred and fifteen per cent of such tax paid during the previous year, in case their turnover for the above goods for the preceding year was above rupees forty lakhs and up to rupees one crore; and
(d) one hundred and twenty five per cent of such tax paid during the previous year, in case their turnover for the above goods for the preceding year exceeded rupees one crore:
Provided that the tax payable under this sub-clause by the dealers covered under Explanation 6 of this clause shall be at the appropriate percentage of tax mentioned in (a), (b), (c) or (d) above, of the tax re-determined under the said Explanation."
(c) after sub-clause (v), the following sub-clause shall be inserted, namely:-
"(vi) Where a dealer who opts for compounding under this clause has been transacting business under a brand name, the compounded tax payable under this clause shall not be less than the compounded tax payable had the business been run as a branch of the franchisee or of other franchisees."
(iv) after clause (f), the following clause shall be inserted, namely:-
"(g) Any dealer in poultry or poultry meat which are brought from outside the State may, at his option, instead of paying tax in accordance with the provisions of the said section, pay tax on the basis of the floor value fixed by the Commissioner from time to time at the rate of 12.5% during the time of entry of goods into the State."
(5) in section 11,-
(i) after sub-section (3), the following sub-section shall be inserted, namely:-
"(3A) Notwithstanding anything contained in this Act, the tax collected by registered dealers under this Act at four percent on the sales of coconut oil, copra and coconut oil cake for the return periods of May, 2007 and June, 2007 shall be deemed to have been validly collected."
(ii) in the proviso to sub-section (5), the word, letters and figures "30th June, 2009" the word, letters and figures "30th September, 2010" shall be substituted;"
(6) in section 12, in the second proviso, after the words "provided further that where the goods" the words and symbols "except plywood, packing cases, splints and veneers" shall be inserted;
(7) in section 24, in sub-section (1), after the existing provisos, the following proviso shall be inserted, namely:-
"provided also that the time limit for the completion of assessments for the year 2005-06, under this section shall be extended up to 31st March, 2011."
(8) in section 25, in sub-section (1), after the existing provisos, the following proviso shall be inserted, namely:-
"Provided also that the time limit for the completion of assessments for the year 2005-06, under this section shall be extended upto 31st March, 2011."
(9) in section 42, in sub-section (1), for the words "rupees forty lakhs", the words "rupees sixty lakhs" shall be substituted;
(10) in section 44,-
(i) in sub-section (8), for the words "fifty per cent of the value of the goods", the words "fifty per cent of the value of taxable goods" shall be substituted;
(ii) in sub-section (10),-
(a) after the words "books of accounts of the dealer", the words, "unless proved otherwise" shall be inserted;
(b) in the proviso, after the words "the registering authority", the words "within ten days of its usage" shall be inserted;
(11) in section 46,-
(i) in sub-section (3), after the existing proviso, the following proviso shall be inserted, namely:-
"provided also that notwithstanding anything contained in this sub-section, in case of transport of notified goods for which advance tax has been paid under sub-section (16A) of section 47, to the shop, branches or godowns of the dealer mentioned in his certificate for registration, delivery note shall not be insisted, if the transport is accompanied by the proof of remittance of advance tax along with any of the other documents specified in this sub-section."
(ii) after sub-section (6), the following sub-section shall be inserted, namely:-
"(7) For the effective enforcement of the provisions of this Act, the Commissioner may, from time to time, issue necessary instructions for regulating the movement of vehicles carrying goods, through selected border check posts.";
(12) after section 54, the following section shall be inserted, namely:-
"55. Appeals to the Deputy Commissioner (Appeals) and Assistant Commissioner (Appeals).-
(1) Any person aggrieved by any order issued or proceedings recorded other than those under sub-section (3), sub-section (8) or sub-section (9) of section 16, sub-section (8) of section 19 passed by an authority empowered to do so under this Act not being an authority above the rank of an Assistant Commissioner may, within a period of thirty days from the date on which the order was served on him, appeal against such order,
(i) to the Deputy Commissioner (Appeals), if the order was passed by an authority of the rank of an Assistant Commissioner; and
(ii) to the Assistant Commissioner (Appeals), if the order was passed by an authority of the rank of a Commercial Tax Officer:
Provided that orders passed under sections 48, 49, 67, 69, 70, 70A and 72 shall be appealable only to the Deputy Commissioner (Appeals):
Provided further that the Deputy Commissioner (Appeals) and Assistant Commissioner (Appeals) may admit an appeal presented after the expiration of the said period if he is satisfied that the appellant had sufficient cause for not presenting the appeal within the said period:
Provided also that no appeal shall be entertained under this sub-section unless it is accompanied by satisfactory proof of the payment of the tax or other amounts admitted by the appellant to be due or such instalment thereof as might have become payable, as the case may be, where the appeal is against an assessment completed under sub-section (6) of section 23, or under section 24 or section 25.
(2) Where an appeal lies against any order under sub-section (1), any order issued under section 66 to rectify any error in such order shall also be appealable under the said sub-section.
(3) The appeal shall be in such form and shall be verified in such manner as may be prescribed, and shall be accompanied by a fee of five hundred rupees.
(4) Notwithstanding that an appeal has been preferred under sub-section (1), the tax or other amounts shall be paid in accordance with the order against which the appeal has been preferred:
Provided that the Deputy Commissioner (Appeals) and Assistant Commissioner (Appeals) may, at his discretion, give such directions as he thinks fit in regard to the payment of the tax before the disposal of the appeal, if the appellant furnishes sufficient security to his satisfaction in such form and in such manner as may be prescribed.
(5) In disposing of an appeal, the Deputy Commissioner (Appeals) and Assistant Commissioner (Appeals) may, after giving the appellant a reasonable opportunity of being heard,-
(a) in the case of an order of assessment or penalty, either confirm, reduce, enhance or annul the assessment or the penalty or both;
(b) set aside the assessment and direct the assessing authority to make a fresh assessment after such further enquiry as may be directed;
(c) or pass such other orders as he may think fit; or
(d) in the case of any other order, confirm, cancel or vary such order:
Provided that at the hearing of any appeal against an order of the assessing authority, the assessing authority or the officer empowered by the Commissioner in this behalf shall be heard.
(6) The order of the Deputy Commissioner (Appeals) and Assistant Commissioner (Appeals) disposing of an appeal before it shall state the point for determination, the decision thereon and the reason for arriving at such decision.
(7) Where as a result of the appeal any change becomes necessary in the order appealed against, the Deputy Commissioner (Appeals) and Assistant Commissioner (Appeals) may, direct the assessing authority to amend such order accordingly and on such amendment being made, any amount paid in excess by the appellant shall be refunded to him or as the case may be the further amount of tax, if any, due from him shall be collected in accordance with the provisions of this Act, as the case may be."
(13) in section 56, in sub-section (2), in clause (b), after the words "an appeal to the", the words and brackets "Deputy Commissioner (Appeals) or the Assistant Commissioner (Appeals) or" shall be inserted;
(14) in section 58,-
(i) in sub-section (1), after the words "Subordinate to him" the words and brackets "other than that of the Deputy Commissioner (Appeals) or Assistant Commissioner (Appeals) or" shall be inserted;
(ii) in sub-section (2), in clause (b), after the words "an appeal to the", the words and brackets "the Deputy Commissioner (Appeals) or Assistant Commissioner (Appeals) or" shall be inserted;
(15) in section 59, in sub-section (1), after the words "an order of " the words, brackets and figure "the Deputy Commissioner (Appeals) or Assistant Commissioner (Appeals) under section 55" shall be inserted;
(16) in section 60,-
(i) for sub-section (1), the following sub-section shall be substituted, namely:-
"(1) Any person objecting to an order passed by the Deputy Commissioner (Appeals) or Assistant Commissioner (Appeals) under sub-section (5) of section 55 or any officer empowered by the Government in this behalf may within a period of 60 days from the date on which the order was served on him, in the manner prescribed, appeal against such order to the Appellate Tribunal:
Provided that the Appellate Tribunal may admit an appeal presented after the expiration of the said period if it is satisfied that the appellant had sufficient cause for not presenting the appeal within the said period:
Provided further that no appeal shall lie in cases where suo moto revision proceedings under section 58 is pending."
(ii) sub-section (1A) shall be omitted;
(iii) for sub-section (2), the following sub-section shall be substituted, namely:-
"(2) The officer authorised under sub-section (1) or the person against whom an appeal has been preferred, as the case may be, on receipt of notice that an appeal against the order of the Deputy Commissioner (Appeals) or Assistant Commissioner (Appeals) has been preferred under sub-section (1) by the other party may notwithstanding that he has not appealed against such order or any part thereof, file within 30 days of the receipt of the notice, a memorandum of cross objection, verified in the prescribed manner, against any part of the order of the Deputy Commissioner (Appeals) or Assistant Commissioner (Appeals) and such memorandum shall be disposed by the Appellate Tribunal as if it were an appeal presented within the time specified in sub-section (1)."
(17) in section 65, after the words and brackets "Deputy Commissioner (Appeals)" the symbol, words and brackets, " Assistant Commissioner (Appeals)" shall be inserted;
(18) after section 71, the following section shall be inserted, namely:-
"71A. Penal provisions for the misuse of registration numbers.-
(1) Any person, who knowingly and wilfully, uses a false registration number or uses a registration number of another person with a view to,
(i) evade payment of tax due, or
(ii) to claim any input tax credit, without actually effecting the purchase, or
(iii) to shield the identity of the person to whom the sale has been effected,
in the invoices issued or in the sale and purchase lists to be filed along with the returns under this Act, shall, on conviction by a Magistrate, be punished with simple imprisonment for a period which may extend to six months or with fine not less than five times of the tax sought to be evaded, or both.
(2) The assessing authority may cancel his registration granted under this Act on conviction by the Magistrate under sub-section (1).
Explanation:- For the purpose of this section, return shall mean revised return if such revised return is filed and registration number shall mean Tax Payers Identification Number (TIN) or the Presumptive tax payers Identification Number granted or generated under the provisions of this Act."
(19) in section 85, in sub-section (2), in sub-clause (b) of clause (x), after the words "to be furnished by an" the words and brackets "Assistant Commissioner (Appeals) or" shall be inserted;
(20) in section 94,-
(i) in sub-section (1), for the words "three Deputy Commissioners" the words "three officers in the rank of Joint Commissioner or Deputy Commissioner" shall be substituted;
(ii) after sub-section (1), the following sub-section shall be inserted, namely:-
"(1A) If the dispute relates to the tax rate of a commodity, the details of the first seller, or the manufacturer of such goods in the State, as the case may be, shall be furnished by the applicant and they shall be made necessary parties to such application."
(iii) in sub-section (5), the words and brackets " including Deputy Commissioner (Appeals) and Assistant Commissioner (Appeals)", shall be inserted at the end.;
(21) in the SCHEDULES,-
(a) in the First Schedule,-
(i) after serial number 3 and the entries against it in columns (2) and (3), the following serial number and entries shall respectively be inserted, namely:-
"3.A Artistic paintings sold through Art Galleries, "
(ii) in serial number 37, in the entries against it in column (2), the symbols and words, "vibhuti, rosaries, prayer beads, venthingas and kasuroopam not made of gold and robes for holy mass." shall be added at the end ;
(iii) after serial number 38A and the entries against it in columns (2) and (3), the following serial number and entries shall respectively be inserted, namely:-
"38.B Products made from water hyacinth and arecanut palm fronds, "
(iv) in serial number 49, in the entries in column (2), the words "exculding imported sugar," shall be omitted ;
(v) in serial number 56, for the entries in column (2), the following entries shall be substituted, namely:-
"Products manufactured by Kudumbasree Units and sold by such units or its marketing agencies approved by the Government ;"
(b) in the Third Schedule,-
(i) after serial number 5 and the entries against it in columns (2) and (3), the following serial number and entries shall respectively be inserted, namely:-
"5.A Ayurvedic tooth powders";
(ii) in serial number 15A, below the entries against it in columns (2) and (3), the following Note shall be inserted, namely:-
"Note: This entry shall be deemed to have come into force on the 1st day of April, 2005."
(iii) after serial number 33 and the entries against it in columns (2) and (3), the following serial number and entries shall respectively be inserted, namely:-
"33.A Dahashamini, i.e. barks, herbs, seeds, and other plant parts, its mixtures, powders etc. used to make ayurvedic medicinal drinking water";
(iv) after serial number 49 and the entries against it in columns (2) and (3), the following serial number and entries shall respectively be inserted, namely:-
"49.A Food products like, dry prawns/dry fish roasts, its chutneys and powders, coconut chutney powders and veppilai katti";
(v) after serial number 51A and the entries against it in columns (2) and (3), the following serial number and entries shall respectively be inserted, namely:-
"51.B Ghee";
(vi) in serial number 55, in the entries against it in column (2), the words "at the point of sale by dealers whose annual turnover of this item does not exceed rupees two crores" shall be omitted;
(vii) after serial number 95 and the entries against it in columns (2) and (3), the following serial number and entries shall respectively be inserted, namely:-
"95.A Packaged drinking water of and above 20 Litres";
(viii) in serial number 124, in the entries against it in column (2), the words and bracket "sugar (imported)" shall be omitted;
(ix) in serial No. 145, in the entries against it in column (2), the words "either prospectively or retrospectively" shall be added at the end;
(c) in List A,-
(i) after serial No. 41 and the entries against it in columns (2) and (3), the following serial number and entries shall respectively be inserted, namely:-
"41.A Corrugated sheets of polypropylene";
(ii) in serial No. 82, in item (1), for the entries against it in column (2), the following entries shall be substituted, namely:-
"Iron oxide including iron oxide pigments of all colour shades commonly called Red oxide, black oxide, yellow oxide etc.";
(iii) after serial No. 135 and the entries against it in columns (2) and (3), the following serial number and entries shall respectively be inserted, namely:-
"135.A Rubber latex dipped goods namely, industrial gloves, agricultural gloves and finger caps only."
9. Validation.-
(1) Notwithstanding anything contained in the Kerala Provisional Collection of Revenues Act, 1985 (10 of 1985) or in the Kerala Stamp Act, 1959 (17 of 1959) or in the Kerala Value Added Tax Act, 2003 (30 of 2004) or in any other law for the time being in force, during the period commencing on and from the 1st day of April, 2010 to the date of publication of this Act, during which the declared provision contained in the Kerala Finance Bill, 2010 (Bill No. 330 of the XII Kerala Legislative Assembly) were in force, anything done or any action taken or any tax or duty collected by virtue of the provisions of the said Bill shall be deemed to have been validly done or taken or collected under the said Acts as if the said amendments had been in force on and from the 1st day of April, 2010 to the date of publication of this Act and no action shall lie against any dealer or authority on the ground of short levy or for refund of excess tax or duty and the tax or duty so collected or paid by a dealer or authority, if any, shall be paid over to the Government.
(2) Notwithstanding anything contained in the Kerala Value Added Tax Act, 2003 (Act 30 of 2004) any exemption or reduction of tax granted by virtue of the provisions of the Kerala Finance Bill, 2010 (Bill No. 330 of the XII Kerala Legislative Assembly) in respect of the period with effect on and from the 1st day of April, 2005 to the date of publication of this Act, shall be deemed to have been validly done and any tax collected or paid by a dealer at such higher rates shall be deemed to have been validly collected or paid and the tax so collected shall be paid over to the Government and shall not be refunded."