GOVERNMENT OF JAMMU AND KASHMIR
CIVIL SECRETARIAT - LAW DEPARTMENT
Jammu, the 9th January, 2006.
The following Act as passed by the Jammu and Kashmir State Legislature received the assent of the Governor on 6th January, 2006 and is hereby published for general information :-
THE JAMMU AND KASHMIR VALUE ADDED TAX (AMENDMENT) ACT, 2006
Act No. IV of 2006.
[6th January, 2006]
Be it enacted by the Jammu and Kashmir State Legislature in the Fifty-sixth Year of the Republic of India as follows :-
1. Short title and commencement,-
(1) This Act may be called the Jammu and Kashmir Value Added Tax (Amendment) Act, 2005.
(2) Sections 3 and 5 of this Act shall be deemed to have come into force with effect from 1st April, 2005 and the remaining provisions of the Act shall come into force from the date of its publication in the Government Gazette.
2. Amendment of section 12 of Act III of 2005,-
In section 12 of the Jammu and Kashmir Value Added Tax Act, 2005 (hereinafter referred to as "the principal Act") in clause (b) of sub-section (4) for the letters, figures and word "Rs.5 lacs", the letters, figures and word "Rs.7.50 lacs" shall be substituted.
3. Amendment of section 21 Act III of 2005.-
In section 21 of the principal Act, in sub-section (9) after clause (ix) the following clause shall be added, namely:-
"(x) who gets the benefit of tax remission."
4. Amendment of section 25, Act III of 2005,-
In section 25 of the principal Act, for the letters and words "Rs. five lacs and at such percentage of the gross turnover", the words "Rupees seven lacs and fifty thousand " and "at such percentage of the taxable turnover" shall respectively be substituted.
5. Insertion of section 79-A in Act III of 2005,-
After section 79 of the principal Act, the following section shall be inserted, namely:-
"79-A. Remission of tax.- Notwithstanding anything contained in life Act, the Government may for the purpose of promotion of industry in the State, by notification in the Government Gazette, grant remission from payment of tax under the Act for such period and subject to such restrictions and conditions as it may deem proper."
STATEMENT OF OBJECTS AND REASONS
The amendment proposed in VAT Act, 2005 aimed to relief the industrial sector under VAT.
The incentives extended to the industrial sector under previous dispensation had ceased w.e.f. 1-04-2005 the date when the VAT regime introduced in the State as there is no provision in J&K VAT Act, 2005 to grant any exemption or remission of tax as VAT regime does not envisage break in VAT chain.
The industrial policy of 1998 provided for exemption from payment of Sales tax on purchase of raw material, sale of finished goods within and outside the State. The Medium and Large Scale units were entitled to exemption on sale of finished goods within the State only. The industrial policy was supposed to be operational up to 2003 and the incentives were available for a period of five years. Therefore a unit coming up in the ultimate year of the operation of the policy would get the benefit up to 2008. The industrial policy announced in the year 2004 provided a cut off date from all the industrial sector as 31-03-2015. The cut of date of sale tax incentives was related to imposition of VAT in the State.
In order to continue the incentives to the industrial sector, the matter was discussed in various fora and placed before the Cabinet. The Cabinet vide its decision No.101/8 dated 7-06-2005 approved the following :-
(i) Small, medium and large scale industrial units shall be provided relief under the VAT regime in the form of remission of VAT on the sale of their finished products. In order that the VAT chain is not broken. VAT at the prescribed rates shall be charged on sale of finished products by such industrial units.
(ii) Small Scale Industrial units shall also be provided relief under the VAT regime on the purchase of inputs through J&K SICOP/J&K Minerals Limited/any other public sector corporation of the State. Such corporation shall not charge VAT from the SSI units but claim financial support to the extent of VAT paid on such products by them from the Government in the J&K Department.
(iii) Relief under the VAT regime shall be subject to the existing negative lists.
(iv) The relief extended up to March, 2010.
Similarly to give smaller dealers some measure of relief the amendment proposed to enhance taxable limit from Rs. 5.00 lacs to Rs. 7.50 lacs and to levy turnover tax on the taxable turnover instead of gross turnover of a dealer whose business is more than 7.50 lac but not more than Rs.20.00 lacks