The Madhya Pradesh VAT (Second Amendment) Bill, 2006

An Bill further to amend Madhya Pradesh VAT Act, 2002.

Be it enacted by the Madhya Pradesh Legislature in the Fifty-Seventh year of the Republic of India as follows :

1. Short title and commencement

(1) This Act may be called the Madhya Pradesh VAT (Second Amendment) Act, 2006.

(2) The provisions of Section 2(ii)(b), Section 19(i)(b) relating to 'Bulk drugs' and Section 19(ii) of this amending Act relating to 'Drugs and Medicines' shall come into force from such date as the State Government may, by notification, appoint; and the remaining provisions of this amending Act shall be deemed to have come into force from 1st April, 2006 subject to the condition that if the rate of tax prevailing before the date of publication of this Act in the Gazette was higher and the amount of tax collected at such higher rate from 1st April, 2006 to the date of publication of this Act in the Gazette,-

(a) has been deposited in the treasury, such amount shall not be refunded; and / or

(b) has not been deposited in the treasury, such amount shall have to be deposited in the treasury.

2. Amendment of Section 2

In Section 2 of the Madhya Pradesh VAT Act, 2002 (No. 20 of 2002) (hereinafter referred to as the Principal Act),-

(i) after clause (d), the following clause shall be inserted, namely :

"(e) Canteen stores means the goods included in Schedule-II, but excluding such goods as the State Government may, by notification, specify";

(ii) in clause (v),

(a) the word "cash" wherever it occur, shall be omitted;

(b) in explanation, after clause (iii) the following clause shall be inserted, namely,-

"(iv) The amount of valuable consideration paid or payable to a dealer for sale of drugs and medicines specified in entry 10 of Part III of Schedule II shall be the maximum retail price printed on the package containing the drugs and medicines, for the purposes of levy of tax under Section 9."

3. Amendment of Section 3

In sub-section (4) of Section 3 of the principle Act, for the words, bracket and figure "Other officers referred to in sub-section (2)", the words, bracket and figure "Other officers referred to in sub-section (2) and Appellate Authority" shall be substituted.

4. Amendment of Section 10

For clause (b) of sub-section (1) of Section 10 of the Principal Act, the following clause shall be substituted, namely :

"(b) the goods other than those specified in Part III of the said Schedule, are consumed or used,–

(i) in the manufacture or processing of goods declared tax free under Section 16 and the manufactured or processed goods are disposed of otherwise than by way of sale in the course of export out of the territory of India; or

(ii) as plant, machinery, equipment and parts thereof in generation, transmission or distribution of electrical energy; or".

5. Amendment of Section 11

In Section 11 of the Principal Act,–

(i) after sub-section (1), the following provisos shall be inserted, namely :

"Provided that in case of a dealer who is a manufacturer, the condition of purchases from a registered dealer shall be limited to the goods specified in Part III and IV of Schedule-II :

Provided further that the option for composition pertaining to the year 2006-07 can be given up to 30th June 2006.

Provided also that a dealer who has obtained registration certificate during a year, may give option for composition for the part period of the year and the option for composition can be given within 30 days from the date of registration"

(ii) for sub-section (3), the following sub-section shall be substituted, namely :

"(3) A registered dealer who opts for composition of tax under sub-section (1) shall not be eligible to any input tax rebate in respect of the goods sold during the year in relation to which such option is exercised by the dealer and the input tax rebate already claimed and adjusted towards the tax payable, shall be paid along with the first quarter of the year."

6. Insertion of Section 11-A

After Section 11 of the principle Act, the following Section shall be inserted, namely :

"Sec. 11-A : Composition of tax by certain registered dealers

(1) (a) The Commissioner may, subject to such restrictions and conditions as may be prescribed, permit any registered dealer, who carries on wholly or partly the business of supplying goods in the course of execution of works contract entered into by him, to pay in lieu of tax payable by him under this Act a lump sum at such rate as may be prescribed and determined in the prescribed manner, by way of composition, and this option for composition will have to be submitted within 30 days of commencement of execution of the works contract or contracts.

(b) The provisions of Section 18, 20, 20-A, 39 and 40 shall not apply to a registered dealer to whom permission to pay a lump sum by way of composition is granted under clause (a) in relation to the period for and the goods in respect of which such composition of tax has been made and who complies with the restrictions and conditions prescribed under the said clause.

(2) For the purpose of determination of the lump sum by way of composition under clause (a) of sub-section (1), the State Government may prescribe different rates for different kinds of contracts.

(3) A registered dealer who opts for composition of tax under sub-section (1) shall not be eligible to any input tax rebate in relation to the period for and the goods in respect of which such option is exercised by the dealer."

7. Amendment of Section 14

In Section 14 of the Principal Act,–

(i) in sub-section (1),&

(a) in clause (a),–

(1) for sub-clause (5), the following sub-clauses shall be substituted, namely :

"(5) consumption or use for/in the manufacture or processing or packaging of goods declared tax free under Section 16, for sale in the course of export out of the territory of India; or

(5-a) consumption or use for/in the manufacture or processing or packaging, other than mentioned in sub-clause (5) above, and in connection with sale of goods declared tax free under Section 16; or

(5-b) consumption or use as plant, machinery, equipment and parts thereof for/in generation, transmission or distribution of electrical energy; or";

(2) in sub-clause (6), in second sub-division, in item (i), for the brackets, figures and word "(3) and (4)", the brackets, figures and word "(3), (4) and (5)" shall be substituted and in item (ii), for the bracket and figure "(5)", the brackets, figures and letters "(5-a), (5-b)" shall be substituted;

(b) after clause (b), the following clauses shall be inserted, namely :

"(c) Where a registered dealer who has opted for composition under Section 11 for a year, does not opt for composition in subsequent year, he shall claim or be allowed input tax rebate in respect of the goods held in stock on the date of commencement of the subsequent year in accordance with the provisions of clause (a) above.

(d) Notwithstanding anything contained in clause (a) where the goods purchased within the State of Madhya Pradesh by Canteen Stores Department, registered under the Act, from a registered dealer after payment to him input tax, are sold as canteen stores by the Canteen Stores Department to serving military personnel and ex-servicemen directly or through regimental or unit run canteens, the Canteen Stores Department shall claim or be allowed in such manner and within such period as may be prescribed, input tax rebate of the amount of such input tax, which is in excess of 4 percent of the purchase price, net of input tax, of such goods.";

(ii) for clause (iii) of sub-section (4), the following clauses shall be substituted, namely :

"(iii) for use as plant, machinery, equipment and parts thereof; or

(iv) for sale as canteen stores; or

(v) for sale or supply to the Central Government or State Government"

(iii) in sub-section (6),–

(a) in clause (iii) and (iv), for the figure "11", the figures, word and letter "11 and 11-A" shall be substituted;

(b) clause (v) shall be omitted.

8. Substitution of Section 16-A

For Section 16-A of the Principal Act, the following section shall be substituted, namely :

"16-A : Saving

(1) Notwithstanding the repeal of the Madhya Pradesh Vanijyik Kar Adhiniyam, 1994 (No. 5 of 1995) or the Madhya Pradesh General Sales Tax Act, 1958 (No. 2 of 1959) repealed by Act No. 5 of 1995 (hereinafter referred to as the repealed Acts), the State Government may, by notification, exempt -

(i) (a) any class of dealers; or

(b) any goods or class of goods in whole or in part,

from the payment of tax under the repealed Act; or

(ii) any dealer or class of dealers from any provision of the repealed Acts or the provision of any rules made thereunder,

for any period before the commencement of this Act and for that purpose it shall and shall always be deemed that the provisions of Section 17 of the Act repealed by this Act or Section 12 of the Act No. 2 of 1959 repealed by Act No. 5 of 1995 have revived for the purpose of such exemption.

(2) Notwithstanding anything contained in any other provisions of the repealed Acts,–

(a) a registered dealer who is an industrial unit eligible for grant of facility of deferred payment of tax, under the scheme providing for grant of incentive to entrepreneur in respect of an industrial unit set up in the State as the State Government may make in this behalf, may make deferred payment of tax pertaining to such period before the commencement of this Act and subject to such restrictions and conditions, as may be specified in such scheme;

(b) the State Government may, by notification, amend any notification, relating to the facility of deferred payment of tax by the industrial units, issued under Section 37 read with Section 80 of the Act repealed by this Act or Section 22-D read with Section 51 of the Act No. 2 of 1959 repealed by Act No. 5 of 1995,

and for that purpose it shall and shall always be deemed that the provisions of Section 37 and Section 80 of the Act repealed by this Act or Section 22-D and Section 51 of the Act No. 2 of 1959 repealed by Act No. 5 of 1995 have revived for the purpose of such deferment or amendment."

9. Amendment of Section 24

After sub-section (4) of Section 24 of the principal Act, the following sub-section shall be inserted, namely :

(4A) Notwithstanding anything contained in any other provisions of this Act but subject to such conditions as may be prescribed, a registered dealer who is eligible to avail of the facility of deferment of payment of tax under the scheme formulated in accordance with the provisions of sub-clause (e) of clause (i) of Section 72, is liable to pay tax under the provisions of sub-section (2) or sub-section (3) or sub-section (5) and where a loan liability equal to the amount of tax payable by the dealer as aforesaid for the period of eligibility to avail of the said facility has been created by any agency or agencies as the State Government may, by general or special order, specify, then such tax shall be deemed to have been paid in accordance with the provisions of sub-section (2) or sub-section (3) or sub-section (5), as the case may be.

10. Amendment of Section 26

In Section 26 of the principal Act,-

(i) in sub-section (1), for the words 'such amount as is shown by the dealer separately in his bill', the words 'whether or not such amount is shown by the dealer separately in his bill' shall be substituted;

(ii) for sub-section (2), the following sub-section shall be substituted, namely :

"(2) Notwithstanding anything contained in any other provision of this Act, any person letting out a works contract of value exceeding three lac rupees to a contractor involving sale of any goods in the course of execution thereof by the contractor shall before making the payment of any amount towards the value of such contract to him, deduct at the rate of two percent or the prescribed rate for lump sum, in respect of a contractor who has opted for composition under Section 11-A, an amount towards the tax payable by the contractor under this Act :

Provided that if the value of labour involved in the contract is more than fifty percent of the contract value, the deduction towards the tax payable shall be made at the rate of one percent.".

11. Omission of Section 27

Section 27 of the Principal Act shall be omitted.

12. Amendment of Section 36

For clause (iii) of sub-section (1) of Section 36 of the Principal Act, the following clauses shall be substituted, namely :

"(iii) where such sale or purchase takes place in the course of import of the goods into, or export of the goods out of the territory of India; or

(iv) where such sale is made to a unit located in a Special Economic Zone notified by the Central Government under the provisions of the Special Economic Zones Act, 2005 (Central Act No. 28 of 2005).".

13. Amendment of Section 37

After sub-section (1) of Section 37 of the Principal Act, the following sub-section shall be inserted, namely :

"(1-A) Notwithstanding anything contained in sub-section (1), if the refund is due to input tax rebate pertaining to sales of canteen stores, the refund shall be adjusted towards any other tax liability of the Canteen Stores Department and on an application by the Canteen Stores Department, the balance of refund may be adjusted towards the tax liability of any other registered dealer."

14. Amendment of Section 39

After sub-section (2) of Section 39 of the Principal Act, the following proviso shall be inserted, namely :

"Provided that a dealer who is an industrial unit having annual turnover of up to ten crore rupees may get his accounts audited by a member of Institute of Cost and Works Accountants of India.".

15. Insertion of Section 70-A

After Section 70 of the Principal Act, the following Section shall be inserted in Chapter XIV, namely :

"Sec. 70-A : Power of State Government to amend Schedule I and II

(1) The State Government may, by notification, amend Schedule I and Schedule II and thereupon the said Schedules shall stand amended accordingly :

Provided that no notification by which the rate of tax is enhanced, shall be issued without giving in the Gazette such previous notice as the State Government may consider reasonable of its intention to issue such notification.

(2) Every notification issued under this Section shall, as soon as may be after it is issued, be laid on the table of the Legislative Assembly and the provisions of Section 24-A of the Madhya Pradesh General Clauses Act, 1957 (No. 3 of 1958) shall apply thereto as they apply to a rule."

16. Amendment of Section 71

After clause (f) of sub-section (2) of Section 71 of the Principal Act, the following clause shall be inserted, namely :

"(fa) the restrictions and conditions subject to which permission may be granted to a registered dealer to pay a lump sum in lieu of tax by way of composition, the rate and the manner of determining such sum under Section 11-A;".

17. Amendment of Section 72

In the proviso to Section 72 of the Principal Act,

(i) in clause (i), for sub-clause (b), the following sub-clause shall be substituted, namely :

"(b) affect any right, privilege, obligation or liability acquired, accrued or incurred under the repealed Act, except the right or privilege accrued under that Act for availing of the facility of industrial concession by way of exemption from or deferment of payment of tax by registered dealers who had established new industrial units in the State of Madhya Pradesh or undertaken expansion, modernisation or diversification in such industrial unit or exemption from payment of tax by registered dealers who had established hotel under the new Tourism Policy, 1995 or the Heritage Tourism Policy of the Government of Madhya Pradesh; or"

(ii) in sub-clause (c) of clause (iv), for the words 'is pending on', the words 'is pending on or arising after' shall be substituted.

18. Amendment of Schedule-I

In Schedule-I to the Principal Act,–

(i) in column (2) against serial No. 1, for entry No. 18, the following entry shall be substituted, namely :

"(18) Levelers and phawada";

(ii) in column (2) against serial No. 2, after item No. (8), the following items shall be inserted, namely :

"(9) Braille writer (10) Braille shorthand writer (11) Braille watch (12) Braille writing frame (13) Braille mathematical instruments (14) Braille globes and maps (Geography) (15) Braille thermometer (16) Braille lactometer (17) Braille barometer (18) Hearing aid (19) Tricycle (for use by handicapped persons)";

(iii) after serial No. 15, the following serial No. and entries relating thereto shall be inserted, namely :

(iv) in column (2) against serial No. 18, for the words "potato and onion", the words "potato, onion and sugarcane" shall be substituted;

(v) in column (2) against serial No. 22, for the word "instruments", the words "instruments, handmade soap, handmade paper and handmade dantmanjan" shall be substituted;

(vi) for serial No. 37 and entries relating thereto, the following serial No. and entries relating thereto shall be substituted, namely :

"37. All certified or truthfully treated seeds."

(vii) for serial No. 38 and entries relating thereto, the following serial No. and entries relating thereto shall be substituted, namely :

"38. Papad, handmade and unbranded badi"

(viii) for serial No. 45 and entries relating thereto, the following serial No. and entries relating thereto shall be substituted, namely :

"45. Handicraft and incense sticks commonly known as agarbatti, dhupkathi or dhupbatti, hawan samagri including lobhan and gugal";

(ix) for serial No. 48 and entries relating thereto, the following serial No. and entries relating thereto shall be substituted, namely :

"48. Fabrics on which additional excise duty is levied or leviable under the Central Excise Tariff Act, 1985 (No. 5 of 1986), towel (sale price of which does not exceed rupees one hundred), gamachha, chadar";

(x) after serial No. 53, the following serial No. and entries relating thereto shall be inserted, namely :

"54. Canteen stores when sold by Canteen Stores Department to serving military personnel and ex-servicemen directly or through Regimental or Unit run canteens and their sale price does not exceed the price fixed by the Quarter Master General of India".

19. Amendment of Schedule-II

In Schedule-II to the Principal Act,–

(i) in Part II,–

(a) in column (2) against serial No. 7, for the bracket and letters "(ACSR)", the bracket, letters and words "(ACSR), AA / AAA Conductors" shall be substituted;

(b) for serial No. 18 and 19 and entries relating thereto, the following serial Nos. and entries relating thereto shall respectively be substituted, namely :

"18. Buckets, ghamela, tasla and tagadi made of iron, steel, aluminium, plastic or other material except precious materials, and crow bar".

"19. Bulk drugs";

(c) in column (2) against serial No. 46, after the word "lamp", the words "kerosene wick stove, kerosene pressure stove" shall be inserted;

(d) serial No. 48 and entries relating thereto shall be omitted;

(e) in column (2) against serial No. 51,

(1) in entry No. (10)(ii), for the words "CD/DVD", the words "Blank CD/DVD" shall be substituted;

(2) after entry No. 12(xiii), the following entry shall be inserted, namely :

"(xiv) Tower components";

(f) serial No. 53 and entries relating thereto shall be omitted;

(g) in column (2) against serial No. 55,–

(1) after entry No. (36), the following entry shall be inserted, namely :

"(36-A) Cigarette filter rod";

(2) after entry No. (44), the following entries shall be inserted, namely :

"(44-A) Copper wire rod, copper wire bar and copper cathode.

(44-B) Copper winding wire, enameled copper wire and bare copper wire";

(3) after entry No. (49), the following entry shall be inserted, namely :

"(49-A) Dextrin and dextrose mono hydrate";

(4) after entry No. (65), the following entry shall be inserted, namely :

"(65-A) Gelatin";

(5) for entry No. (69), the following entry shall be substituted, namely :

"(69) Glucose";

(6) after entry No. (71), the following entry shall be inserted, namely :

"(71A) Goods consumed in manufacture of goods by the units, situated in the State of Madhya Pradesh, of the defence production department of the Government of India."

(7) after entry No. (117), the following entry shall be inserted, namely :

"(117A) Paper covered aluminium strips / wires."

(8) after entry No. (146), the following entry shall be inserted, namely :

"(146A) Refractory castable and monolithics"

(9) for entry No. (178), the following entry shall be substituted, namely :

"(178) Vegetable waxes, paraffin waxes and Bees wax";

(10) after entry No. (181), the following entry shall be inserted, namely :

"(181-A) Yeast";

(11) for entry No. (191), the following entry shall be substituted, namely :

"(191) All kinds of ropes and twines including jute twine";

(12) after entry No. (191), the following entry shall be inserted, namely :

"(191-A) Paper cones and bobbins";

(13) for entry No. (193), the following entry shall be substituted, namely :

"(193) Self-adhesive tape";

(h) in column (2) against serial No. 61, after the word "fastner", the words "that is to say - hinges, nails, rivets, cotter, cotter pins, staples and panel pins" shall be inserted;

(i) in column (2) against serial No. 65, after the words 'straps thereof', the bracket and words '(other than the goods specified in Schedule I)' shall be inserted;

(j) for serial No. 71 and entries relating thereto, the following serial No. and entries relating thereto shall be substituted, namely :

"71. Readymade garments, madeup of fabric including towel (sale price of which exceeds rupees one hundred), pillow cover, rajai cover, blanket, socks, handkerchief, ties."

(k) serial No. 75 and entries relating thereto shall be omitted;

(l) in column (2) against serial No. 76, after the word "machines", the words "and atta chakki" shall be inserted;

(m) for serial No. 78 and entries relating thereto, the following serial No. and entries relating thereto shall be substituted, namely :

"78. Skimmed milk powder, UHT milk and flavoured sweetened milk";

(n) after serial No. 84, the following serial No. and entries relating thereto shall be inserted, namely :

(o) after serial No. 85, the following serial No. and entries relating thereto shall be inserted, namely :

(p) in column (2) against serial No. 90, for the existing entries, the following entries shall be substituted, namely :

"Tractors, power tillers, threshers, harvesters, attachment and parts (including tyres, tubes and flaps) thereof";

(q) in column (2) against serial No. 91, after the word "Transformers", the words "and parts thereof" shall be inserted;

(r) in column (2) against serial No. 105, after the word "powder", the words "plastic scrap" shall be inserted;

(s) after serial No. 108, the following serial No. and entries relating thereto shall be inserted, namely :

(t) in column (2) against serial No. 110, for entry No. (5), the following entry shall be substituted, namely :

"(5) Tapioca and sabudana";

(ii) in Part III,-

(a) in column (2) against serial No. 1, after the word 'diesel' the bracket and words '(other than light diesel oil and furnace oil) shall be inserted;

(b) after serial No. 6, the following serial Nos. and entries relating thereto shall be inserted, namely :

20. Repeal and Saving

(1) The Madhya Pradesh VAT (Amendment) Ordinance, 2006 (No. 5 of 2006) is hereby repealed.

(2) Notwithstanding the repeal of the said Ordinance, anything done or any action taken under the said Ordinance shall be deemed to have been done or taken under the corresponding provision of this Act.