8th Floor,Vikirikar Bhavan,
Mazgaon, Mumbai 400010
To
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No. VAT/AMD-2013/1A/ADM-8
Sub : Amendments to the Maharashtra Value Added Tax Act, 2002.
Ref. : 1 Maharashtra Act No. Vlll of 2013 dated the 20th April 2013
2. Trade Circular bearing No. 9T of 2009 dated the 21st March, 2009.
3. Trade Circular bearing No 12T of 2012 dated the 1st August 2012.
4 Notification published in the Government Gazette, Extra ordinary Part-IV-B No 61 dated the 25th April 2013
Gentlemen / Sir /Madam,
To give effect to the Budget proposals, a Bill (Legislative Assembly Bill No XI of 2013] to amend the Maharashtra Value Added Tax Act, 2002 was introduced in both the houses of the Legislature. The said Bill has been passed by both the houses of the Legislature and the Act No VIII of 2013 is now published in the Maharashtra Government Official Gazette dated the 20th April 2013.
The salient features of the amendments to the Maharashtra Value Added Tax Act, 2002 are briefly explained below:
1. Date on which the Act shall come into force:-
(1) Sections 5 to 14 of the Mah. Act No VIII of 2013 (Amendment Act) pertains to amendments to the Maharashtra Value Added Tax Act, 2002
(2) The State Government in exercise of the powers conferred by sub-section (2) of section 1 of the Amendment Act issued a notification cited at Ref.-4 and appointed 1st May 2013 to be the date on which provisions of sections 5 to 13 shall come into force.
(3) Section 14 of the said Act, as stated therein, shall come into force with effect from the 1st April 2005. This secuon deals with the amendments to the Entry 34 of SCHEDULE 'A' appended to the MVAT Act, 2002. This entry pertains to Milk.
2. Amendment of section 2 clause (15A) and clause (17A):-
(1) Clause (15A) and clause (17A) of section 2 defines the term 'Motor Spirit' and 'Petroleum Products', respectively.
(2) A technical amendment is carried out. In both clauses the word "or" is replaced by the word "and".
3. Amendment of section 20:
(1) Amendment to sub-section (4): Sub-section (4) provides for filing of the revised return under contingencies given in clause (a), (b) or (c). The clause (b) and clause (c) are now amended.
(a) Amendment to clause (b): Filing of Revised Returns as advised by Auditor: -
(i) As per the provisions of section 61, Chartered Accountant and Cost Accountant undertake the audit of the books of account. Thereafter, an Audit Report is prepared and filed in Form 704.
(ii) As per existing provisions, to give effect to the observations/ discrepancies pointed out by the auditor; dealer may file revised return, revising each return that contains the omission or incorrect statement. This process is cumbersome and also time consuming.
(iii) Now, this clause is amended so as to provide that the dealer, who under aforesaid circumstances, desires to file revised return, may file a single revised return in respect of the period(s) for which the Auditor has pointed out the discrepancies. Thus, if dealer accepts the Auditors recommendations then, said dealer has to file only one revised return for entire year.
(iv) As per amended provision, the dealers should file a single revised return instead of revising all the returns and disclose in the said single revised return, the gross turn-over of sales and purchases and requisite other details, for entire year. It has been observed that in many cases dealer discloses only the incremental turnover of sales or purchases in revised return, ft is hereby made clear that in the said revised return the deader should disclose the entire turnover of sales and purchases and not the only incremental turnover.
Eg. Frequency of filing return of Dealer 'X' is monthly. Auditor under sections 61 has carried out audit for year 11-12 and noticed that the dealer has applied incorrect tax rate i.e. 5% instead of @ 12.5%.
• Accordingly, auditor has recommended revision of returns for period starting from 1st April 2011 to 31st March 2012. As per amended provisions, the dealer, if accepts the auditors recommendations and desires to file revised then, he shall file a single revised return instead of revising all the 12 monthly returns and disclose the turnover of sales and purchases with other requisite information for entire year.
• In order to give effect to the findings of the auditor, the dealer should use suitable Form of the return and in Row 4 of the return, mention the period as 1st April 2011 to 31st March 2012 and accordingly fill all the revised details pertaining to turnover of sales and purchases along with other requisite details for entire year and submit electronically such single revised return.
• This single revised return is to be filed within thirty days of date prescribed for submission of the audit report.
(b) Amendment to clause (c): Filing of Revised Returns as advised By Sales Tax Authorities: -
(i) As per the earlier provisions of section 63(7), the Sales Tax Authorities may, after commencement of audit, investigation or otherwise, issue intimation notice in Form 604 and inform the dealer about reduction of set-off, refund or likely additional demand of tax, interest, if any. If dealer agrees with the observations contained in the intimation sent, he may file a revised return, in respect of the periods for which the discrepancies have been pointed out by the said Authority.
(ii) Amendment similar to clause (b) ) is also made to this clause As explained under the aforesaid Para the dealer if desires to file a revised return shall file a single revised return instead of revising all the returns that contains the omission or incorrect statement.
(iii) Thus as per section 20(4) clauses i.e. clause (b) and (c), if dealer agrees with the recommendations of an auditor or contents of an intimation, sent as per section 63(7) and desires to file revised return then, such revised return should be for entire year and the said dealer will be entitled to file only one such revised return in respect of that year.
(iv) However, if the business is disposed of or discontinued or for any other reasons the period is shorter than the year, then dealer may file single revised return for such shorter period,
(2) Amendment to sub-section (6).-
(a) Sub-section (6) of section 20 provides for late fee in the event of failure to file return within prescribed time. This sub-section was amended and made effective from 1st August 2012.
(b) After aforesaid amendment under no circumstances the dealer can upload return after due date unless the late fee is paid. This sometimes causes hardship.
(c) To resolve this, the sub-section (6) has been amended and the State Government is vested with the powers to grant exemption in whole or in part from the payment of late fee in the public interest. For this, State Government may issue notification so as to provide exemption from payment of late fee to the certain class or classes of the dealers in specified circumstances.
(d) The exemption from payment of late fee will be available to the class or classes of dealers for the reasons notified by the State Government.
4. Amendment sub-section (1) of section 23:-
(1) Section 23 provides for the assessment of tax under different contingencies. Sub-section (1) deals with the assessment of tax in case of a dealer who has failed to file the return in respect of a particular period or periods. The aim of this section is to get return from the defaulting dealer. Once the dealer files the return for the default period then, the assessment order passed under this sub section shall stand cancelled.
(2) The law as it stood prior to amendment requires dealer to make an application for cancellation of assessment order. After receipt of application along with evidence for payment of tax as per return, the concerned officer after verification of evidence was required lo cancel the assessment order so passed. The entire process was cumbersome and time consuming. To make this process simple and transparent, a Trade Circular cited at Ref-3 above (dated 1st August 2012) was issued. The procedure explained in the said Trade Circular was in practice for some time. To give effect to this, amendment to proviso to sub-section (1) of section 23 is carried out.
(3) As a result of this amendment, the condition of payment of tax and submission of application for cancellation of the assessment order is done away with. The order so passed shall stand cancelled automatically, once the return in default is filed.
(4) The procedure for automatic cancellation of the Unilateral Assessment order passed under section 23(1) has been elaborately explained in Trade Circular No. 12T of 2012 dated 1st August 2012. The dealers are requested to follow the instructions given in that Trade Circular.
5. Insertion of New section 32A:- A new section 32A is inserted; it deals with the payment of tax or interest under certain circumstances. This section contains two sub-sections same are explained below :
(1) Sub-section (1):
(a) Audit report is submitted as per the provisions of section 61. The auditor makes certain recommendations which may relate to reduction of set-off, forfeiture of excess tax collected, payment of additional tax, reduction in the refund, revision of CQB etc.
(b) In some cases the auditor may have advised the dealer to make payment of additional tax, interest and same has also been accepted by the dealer. However, if dealer does not make said payment, the department could not recover this amount unless assessment order is passed.
(c) Sub-section (1) of section 32A provides that if it is noticed by the Commissioner that the auditor has made recommendations that the dealer is required to pay certain sum with interest and the same is accepted by the dealer either partly or fully then the Commissioner is empowered to directly issue demand notice in respect of amount so accepted by the dealer.
(d) The dealer after receipt of the demand notice is required to pay the said amount within 30 days from the date of receipt of the said notice
(e) The powers under this section are conferred upon the Commissioner. These powers are in-turn delegated to all the Sales Tax Officers, Assistant Commissioner of Sales Tax and Deputy Commissioner of sales Tax. Therefore, these authorities, under aforesaid circumstances, may directly issue Demand Notice for the amount recommended as payable by the Accountant and accepted by the dealer.
(f) This being the procedural amendment, such Demand Notice may be issued for any pending period in respect of which the Accountant has made the recommendations and dealer has accepted the said amount either fully or partly.
(2) Sub-section (2):
(a) This sub-section provides that the provisions with regards interest as provided under section 30(2) shall apply mutatis mutandis to such payment.
(b) Therefore, the interest for the delayed payment shall be calculated by the dealer considering the due date for the month for which such payment was found to be payable and date on which such payment is made.
(c) As per Explanation to section 32 and this section, the powers are given to the Commissioner not to recover the dues of Rs. 100 or less raised as a result of any proceedings by or under this Act. The powers conferred upon the Commissioner are delegated to all the Sales Tax Officers, Assistant Commissioner of Sales Tax and Deputy Commissioner of sales Tax. Therefore, these authorities, under aforesaid circumstances, shall not recover the dues of Rs. 100 or less.
6. Amendment to sub-section (5) of section 41:-
(1) Section 41 provides for the exemption and refund to certain class or classes of the dealer. A scheme for taxation of liquor is in force for quite some time. The amendment to sub-section (5) is carried out to provide for scheme of taxation of Wine on the lines of liquor. As a result of this amendment, now the wine will also be taxed at first point of sale.
(2) Accordingly, enabling provision is made and powers are being taken by the State Government to issue notification and provide for the Scheme of taxation for wine as is provided for liquor. Notification to this effect will be issued shortly.
7. Amendment to section 50-
(1) Section 50 deals with the refund of the excess lax paid by the dealer and adjustment of such excess tax towards the recovery of the outstanding dues (tax liability) under MVAT Act or Central Sales Tax Act, 1956 or Entry tax on Goods Act, 1987 Act.
(2) Sub-section (2) of the said is amended. A proviso is added. Prior to amendment, carrying forward of refund of Rs. One Lakh or less to the immediate succeeding year was allowed administratively.
(3) Now, as a result of the amendment, any dealer whose refund claim for the return period ending March 2013 or March of subsequent year is Rs. Five Lakh or less may, carry forward the same to the return or revised return for the immediate succeeding year.
(4) The amended provision shall be effective from the period ending March-2013.
Eg. A dealer 'X' for the return period ending March 2013 has refund of Rs. 5 Lakh.
• Now the dealer may either claim the refund in the return and submit application for refund in Form-501 or, may carry forward the same to the return or revised return filed for the period ending month, or Quarter or, as the case may be, the six-month of year 2012-13.
8. Amendment to section 51.
(1) Section 51 provides for the refund as per return. The application for refund is required to be filed only after end of the year to which such application relates except in case of dealers covered under sub-section (3)(a) who, may submit application for refund as per frequency of filing of return.
(2) At present this facility is available for four categories of dealers. Now two new categories are added, these includes,-
(a) mega units to whom Identification Certificate is issued by the Commissioner of Sales Tax (under Package Scheme of Incentive-2001, or, as the case may be, Package Scheme of Incentive-2007) and
(b) the dealers who are engaged in the selling of the goods in the course of inter-State Trade or commerce and turn-over of said inter-State sales in immediate previous year exceeds fifty per cent, of the total turn-over of sales for that year.
(3) Now, aforesaid categories of dealers shall also be eligible to submit application for refund before the end of the financial year starting from April 2013.
9. Amendment to section 61:-
(1) Section 61 provides for preparation of audit report by Accountant. Explanation-I of sub-section (1) explains the term Accountant. For the purposes of this section the Accountant means Chartered Accountant or Cost Accountant.
(2) A technical amendment is carried out to this sub-section (1) of this section. The term "Accountant" appearing in sub-section (1) of section 32A will have the same meaning as is provided in Explanation to sub-section (1) of section 61.
10. Amendment to section 82:-
(1) Section 82 deals with the appearance by the Legal Practitioner, Chartered Accountant, and Cost Accountant before Sales Tax Authorities.
(2) Various sub-sections under section 82 are amended so as to include Company Secretary. In view of this, the Company Secretaries are also authorized to appear before Sales Tax Authorities.
11. Amendment of Schedule Entries ;-
(1) Section 14 of the Mah, Act No. VIII of 2013 deals with the amendment to Entry 34 of the SCHEDULE A appended to the Maharashtra Value Added Tax Act, 2002. This Schedule entry is amended with retrospective effect i.e. from 1st April 2005.
(2) The Entry 34 of SCHEDULE A specifies the Milk but clause (b) of the said entry excludes Milk containing "any ingredients". The words "any ingredients" has created the doubts about the taxability of Milk obtained by addition of Milk Fat. Milk Powder and SNF.
(3) By this amendment, it is made clear that Milk obtained by addition of Milk Fat, Milk Powder and SNF will not be covered under exclusion as provided under clause (b) and will remain tax free.
12. The amendments to various entries in the Schedule appended to MVAT Act, 2002 are also carried out by notification dated 30th March 2013 and 4th April 2013, To explain these amendments a separate Trade Circular is being issued
13. This circular cannot be made use of for Legal interpretation of provisions of law as it is clarficatory in nature, if any member of the trade has any doubt, he may refer the matter to this office for further clarification.
14. You are requested to bring the contents of this circular to the notice of the members of your association.
(Dr. Nitin Kareer)
Commissioner of Sales Tax
Maharashtra State, Mumbai.