Sub.: Partial audit assessment for F.Y. 2016-17 and F.Y. 2017-18 (i.e. for the period from 1st April, 2017 to 30th June, 2017) under the Gujarat VAT Act.

Ref.: (1) Government resolution No. APB / 102020 / 108 / 195224/K dated 5th June, 2020.

(2) Government resolution No. GST-102019-1006-TH dated 6th December, 2019.

(3) Circular No. 23/2020 Dated 3rd July, 2020 on withdrawal of notices for audit assessment under the VAT Act.

The Commissioner of Commercial Tax and any officer authorized in this behalf, is empowered to undertake audit assessment under subsection (2) of section 34 the Gujarat Value Added Tax Act, 2003 (hereinafter referred to as "the Act") for F.Y. 2016-2017 and F.Y. 201718 (i.e. for the period from 1st April, 2017 to 30th June, 2017). The time limit for completion for such audit assessment ends on 31st march, 2021 and 31st march, 2022 respectively.

2. Notices for audit assessment have been issued by the concerned assessing officers under sub-section (2) of section 34 of the Act requiring the dealer to appear with books of account and all evidences in support of the returns or such other evidences as specified in the notices. The notices for the above period have already been served in all such cases.

3. The COVID-19 pandemic has spread across the globe including India causing immense loss to lives and health of people, adversely impacting business and causing disruption in supply chain. Now, there is also necessity to comply with the norms of social distancing. Further, the Department is implementing the Goods and Services Tax and therefore, the pending work under the Act and the Central Sales Tax Act, 1956 (herein after referred to as "the CST Act") needs to be disposed expeditiously.

4. The Gujarat Chamber of Commerce and Industries, other trade associations and tax practitioners have represented to the Government to accept the liability as per the return furnished under the Act and not to undertake the detailed process of assessment in case of small dealers to avoid inconvenience and remove uncertainty in the mind of dealers.

5. The Government of Gujarat having considered the above, has given its consent to simplify pending assessment proceedings for certain category of dealers.

6. Accordingly, it has been decided to undertake partial audit assessment under section 34 of the Act for the following category of dealers:

A registered dealer:-

(i) for F.Y. 2016-2017, having gross total turnover less than Rs. 10 crore during F.Y. 2016-17;

(ii) for F.Y. 2017-2018, having gross total turnover less than Rs. 2.5 crore during F.Y. 2017-18 (i.e. for the period from 1st April, 2017 to 30th June, 2017); and

(ii) in whose case the notice for audit assessment has not been withdrawn in accordance with the circular referred to at Sr. No (3) above, solely due to the fact that he has made purchases from a dealer whose registration is cancelled under clause (i) of subsection (5) of section 27 of the Act (herein after referred to as "the dealer whose registration is cancelled retrospectively") and has claimed tax credit during F.Y. 2016-2017 and / or F.Y. 2017-18 (i.e. for the period from 1st April, 2017 to 30th June, 2017) on such purchases.

However, partial audit assessment in case of a registered dealer who falls under the above category and who has applied under "Vera Samadhan Yojana -2019" referred to at Sr. No. (2) above, in the category of "self-declaration of liability" and has admitted the tax liability under the Act for F.Y. 2016-2017 and / or F.Y. 2017-18 shall be undertaken as per the Circular No. 27/2020 dated 3rd July, 2020.

7. Conditions for partial audit assessment:

The dealer who desires to avail benefit of the partial audit assessment for F.Y. 2016-2017 and / or F.Y. 2017-18 (i.e. for the period from 1st April, 2017 to 30th June, 2017) shall:-

(a) admit and furnish an undertaking in the Annexure enclosed herewith on or before 17 August, 2020, to pay the tax liability equivalent to the amount of tax credit claimed during the above period on purchases made from the dealer whose registration is cancelled retrospectively along with applicable interest and penalty under sub-section (7) of section 34 of the Act @25% on such tax liability, on or before 30th September, 2020;

(b) pay, on or before 30 September, 2020,-

(i) tax liability equivalent to the amount of tax credit claimed during the above period on such purchases;

(ii) applicable interest on tax liability referred to at sub-clause (i) above; and

(iii) penalty under sub-section (7) of section 34 of the Act @ 25% on tax liability referred to at sub-clause (i) above.

8. Procedure of Partial Audit Assessment:-

i. The assessing officer will send an intimation electronically to all the concerned dealer mentioning details of his purchases made from the dealer whose registration is cancelled retrospectively, input tax credit which is likely to be dis-allowed during F.Y. 20162017 and / or F.Y. 2017-18 and tax liability that may arise on account of such dis-allowance.

ii. The dealer who desires to avail facility of partial assessment under this circular shall furnish an undertaking electronically in the Annexure enclosed herewith on or before 17 August, 2020, to pay his liability as mentioned in communication.

iii. The dealer will have to pay such admitted liability in cash, on or before 30th September, 2020.

iv. On payment of admitted liability in cash by the dealer, the assessing officer will pass an assessment order under section 34 of the Act.

v. Such assessment proceedings will be restricted to the issue of liability arising out of purchases made from the dealer whose registration is cancelled retrospectively and subsequent claim of input tax credit on such purchases.

vi. While passing the assessment order, penalty under sub-section (7) of section 34 of the Act @ 25% shall be charged and no other penalty shall be charged.

9. However, if a registered dealer who has failed to file return in respect of any period during the said year, he shall not be given the benefit of partial audit assessment under the Act unless he has filed annual return for the said year.

10. The decision of partial audit assessment under the Act in case of dealer shall not have any effect on his pending assessment proceedings, if any, under the Central Sales Tax Act, 1956.

(J. P. Gupta)

Commissioner of Commercial Tax,

Gujarat State, Ahmadabad.

ANNEXURE

(As per Circular No.: 25/2020 dated 3rd July, 2020)

Undertaking for payment of admitted tax liability for the purpose of

partial audit assessment for the F.Y ........................ under the Gujarat Value

Added Tax Act, 2003

Name of dealer:

TIN: ...................................

I, .................................... , (Proprietor / partner / managingdirector / Trusty / authorized person) of ....................... (Name of the dealer) hereby request for partial audit assessment for the F.Y ...................... under sub-section (2) of Section-34 of the Gujarat Value Added Tax Act, 2003 as per the Circular No.: 25/2020 dated 3rd July, 2020, issued by the Commissioner of Commercial Tax, Government of Gujarat in this behalf.

2. I hereby give undertaking to pay, on or before 30 September, 2020, tax liability of Rs .................. along with applicable interest on such liability and penalty of Rs ................... (which is 25% of such liability) as indicated in your intimation letter / mail No ..................... Dated ...........................

Note:

(i) The dealer who desires to avail benefit of above circular shall be required to furnish an undertaking separately for F.Y. 2016-2017 and F.Y. 2017-18.

(ii) The undertaking shall be furnished electronically to the concerned assessing officer on or before 17 th August, 2020.