Drafted and Compiled by CA Rip Das for circulation amongst

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Drafted and Compiled by CA RIP DAS
FOR CIRCULATION AMONGST MEMBERS ON SEMINAR ORGANISED BY EASTERN
INDIA REGIONAL COUNCIL OF THE INSTITUTE OF CHARTERED ACCOUNTANTS OF
INDIA ON 27TH APRIL, 2013 AT R. SINGHI HALL
The State Budget of West Bengal for the year 2013-14, has enacted some changes in
the Act & Rules relating to Professional Tax and West Bengal Value Added Tax
through State Finance Act, 2013, its Bill and has passed two Notification bearing Nos.
543-L-F.T. dated 26.03.2013 and 369-F.T. dated 28.03.2013. The effects of those
changes are mostly effective from 1st April, 2013 unless separately stated. The changes
are stated below in simple language for understanding of every person:A. Changes in The West Bengal State Tax on Profession, Trades, Callings and
Employments Act, 1979.
1. The definition of the term “Person” as defined in the Act has undergone a
change so as to include ‘a Hindu Undivided Family, Firm, Company,
Corporation or other Corporate Body, any Society, Club or Association or
Branches or Offices of such entities but does not include any person who
earns Wages on a casual basis.
Thus, from the above it is clear that every above stated person has henceforth
will be required to pay Enrolment Taxes for each Branches or Offices at
the applicable rate for the financial year 2013-2014 and henceforth. Further,
each Branches or Offices will be henceforth treated as a Separate
Person for the purpose of Enrolment Tax.
2. A new Section 5C has been inserted in which an Immunity has been granted
to all Persons who has not yet got themselves Enrolled or Registered, to get
himself or themselves to Enrolment or Registration as the case may be
within 31st January, 2014, to whom no Notices have been issued u/s 17 of
the Act or whose Books of Accounts have not been seized u/s 17 of the Act,
by paying Taxes for the last 2 (two) years at the applicable rate together
with Interest thereon. Such Enrolment or Registration will be granted
within 1 (one) month from the date of the application along with a
Declaration, if the same is found to be in order.
3. A new Section 6A has been inserted which is more or less on the same
principle as laid down in corresponding Section 43 under the West Bengal
Value Added Tax Act, 2003, wherein an Departmental Professional Tax
Audit will be done within 3 (three) months from the date of selection of a
person. The period of 3 (three) months can be further extended by another 3
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(three) months. The person against whom such Report will be drawn will be
allowed an opportunity to submit his objection if any against the allegation
drawn in such Report. The Computation of Tax in the Report and the
Report will be converted into a Notice of Demand and Assessment
Order if the Demand stated there in is not paid within 1 (one) month
from the date of its raising.
4. A new Section 6B has been inserted, where in an benefit has been given to a
person who has not filed his return of Tax for one or more periods up to
31st March, 2012 will be allowed to pay the taxes without Interest and
Late Fee to file the same with in 31st January, 2014 provided no Notice
u/s 17 has been issued against the said person.
5. A new Section 7A has been inserted where in as soon as a return is
submitted will be treated to be summarily assessed provided all taxes,
interest and late fee has been paid along with the return. Such Summary
assessment cannot be reopened unless permission is obtained from
Commissioner under sub-section 3 of section 7. Such reopening can be done
within a period of 6 (six) years from the date of submission of return.
6. After Section 10 a new Proviso has been inserted where in a Director or
Secretary or Manager of a Company fails to make payment of taxes shall
be held equally liable for such taxes.
B. Changes in The West Value Added Tax Act, 2003.
1. Clause 18 of Section 2 has been amended, where in a Dealer enjoying
Composition of payment of taxes under any of the sub-sections of Section 16
will not be allowed to avail Input Tax Credit.
2. Clause 26 of Section 2 has been amended, where in a Dealer enjoying
payment of Output Tax under Composition scheme will be covered by all
sub-sections of Section 16 henceforth.
3. Section 8 has been amended by giving more Power to the Bureau of
Investigation, who will henceforth be authorized to assess tax, interest,
penalty and late fee upon a dealer, whose Books of Accounts and records
are with them which has been impounded during the course of search or
investigation carried out by them. Bureau of Investigation will have all
powers to assess as provided for section 42, 66, 66A, 66AA, 67, 68, 69, 70,
71, 72 74 75 76 77, 78, 79 80 & 81.
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4. Sub-section 2 of Section 12 has been amended to include a dealer enjoying
payment of taxes under Composition Scheme to pay Taxes on his Turnover
of Purchases if the said Aggregate Sale Price or Contractual Transfer
Price of that dealer exceeds Rs.50 Lakhs in that previous year or from that
date in the previous year when the Turnover of Sales or Contractual Transfer
Price exceeds the said ceiling of Rs.50 Lakhs.
5. In Clause (b) of sub-section (2) of Section 16 the rate of tax has been
enhanced from 4% to 5%.
6. Similarly in Clause (ba) of sub-section (2) of Section 16 the rate of tax
has been enhanced from 13.50% to 14.50%.
7. Sub-section (3) of Section 16 has been amended to allow a dealer to pay
Compounding rate of Tax @0.25% on his Turnover of Sales to a dealer
enjoying Composite Scheme are henceforth will be allowed to pay tax
@0.25% or at fixed amount of Rs.7,000/- if Turnover of Sales for the
year 2012-13 does not exceed Rs.30lakhs or Rs.12,000/- if Turnover of
Sales for the year 2012-13 exceeds Rs.30lakhs but does not exceeds
Rs.50Lakhs.
8. The option to pay taxes at Compounding Rate as per provisions of Subsection (5) of Section 16 once opted by a dealer shall be Final and cannot
be revoked again. Such option has to be exercised within 90 days from the
starting of the year for an old dealer and within 1 (one) month by a newly
registered dealer.
9. Due to increase of rate of tax clause (a) of sub-section (1) of Section 18
has been amended and the rate of tax has been enhanced from 4% to
5%.
10.Similarly in clause (aa) of sub-section (1) of Section 18 the rate of tax has
been enhanced from 4% to 5%.
11.Similarly in clause (b) of sub-section (1) of Section 18 the rate of tax has
been enhanced from 13.50% to 14.50%.
12.The option to pay taxes at Compounding Rate as per provisions of Subsection (4) of Section 18 once opted by a dealer shall be Final and cannot
be revoked again. Such option has to be exercised within 90 days from the
starting of the year for an old dealer and within 1 (one) month by a newly
registered dealer.
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13. In order to claim Input Tax Credit earlier there was an embargo in
Section 22(11) of the Act where in a Dealer was required to maintain such
registers and Books of Accounts and such accounts as referred to in
Section 63 in such manner as may be prescribed. The said sub-section (11)
to section 22 has been deleted.
14.Earlier for Voluntary Registration a dealer as per First Proviso to section
24(1) was required to have a turnover of Sales or contractual transfer price of
minimum Rs.50,000/-. The said proviso has been amended to by giving
Power to the Commissioner to waive such requirement on prayer of a
dealer by an order in writing.
15.A Transporter, Carrier or Transporting Agent will be required to
display the Certificate of Enrolment obtained by him u/s 25 of the Act at
a conspicuous place of his business and shall mention the said Enrolment
Number in all the Consignment Notes issued by him. If the Transporter,
Carrier or the Transporting Agent fails to comply with the provisions of
section 25(1) then he will be penalized with a fine of Rs.1,000/- for each
month of default to get himself enrolled or amend his registration
Certificate as the case may be. The Certificate of Enrolment issued to a
Transporter, Carrier or Transporting Agent will be cancelled if it is found
on enquiry that the said Transporter, Carrier or Transporting Agent
ceased to exist at the place of business or has obtained the enrolment on
the basis of a false representations or documents or who has failed to
comply with notices issued to him u/s 66A of the Act.
16. The ceiling for conducting VAT Audit as prescribed in Section 30E to be
carried out by a Chartered Accountant or a Cost Accountant has been
enhanced from Rs.3 Crore to Rs.5 crore for the financial year 2013-2014.
Thus, for the financial year 2012-2013 the ceiling will remain at Rs. 3 Crore.
However, all Private and Public Limited Companies have to carry out
the said Audit irrespective of their Turnover of Sales or Contractual
Transfer Price or Turnover of Purchases.
17.Sub-section (2) in Section 31 has been inserted to make it mandatory for all
dealers selected for e-payment to make e-payment of monthly tax liability
only otherwise a Penalty of Rs.1,000/- will be imposed for each such
default in making e-payment of taxes. However, Commissioner can exempt
such Penalty if it is proved that such payment was made under compulsion
for reasons beyond his control.
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18.After third Proviso of Section 32(2) an amendment has been made to
exempt a dealer from paying Late Fees for the period of filing Return
with unpaid taxes up to the date of full payment of taxes if such amount of
unpaid taxes are below Rs1,000/-. However, for dealers located in subdivisions of Darjeeling, Kalimpong or Kurseong in Darjeeling District
who have not filed their returns for the periods from April, 2008 to June,
2011 will be allowed to deposit their Returns without payment of Interest
and Late Fee if those returns are deposited within 30 th June, 2013.
However, if any Late Fee and Interest has already been paid by Dealers
located in such areas the said amount of Interest and Late Fee will not be
refunded.
19.Similarly for the above dealers Section 33 has also been amended for non
payment of Interest.
20. Proviso to Section 40 has been amended to allow dealers not to deduct
Taxes at Source where the amount involved is below Rs.10,000/- in the
Tax Invoice, Invoice or Bill of a single transaction or multiple transactions
with a dealer during a year.
21. Sub-section (3A) has been inserted in Section 40 where in dealer after
filing of Return of STDS detects some errors or omissions of genuine
nature wherein his tax liability increases then such dealer is allowed to file
a revised Statement within 6 (six) months from the date of filing Original
Return of STDS.
22.Sub-Section (2) of Section 43A has been amended in respect of Special
Audit of Dealers at their place of business, notwithstanding anything
contained in Section 47 or 47A or 47AA . Henceforth, Special Audit can be
carried out within 6 (six) years for that year or part of that year for which it
relates. The provisions of Section 43(3) and Section 43(5A) shall apply
mutatis mutandis in respect of Special audit of dealers.
23.Section 47(1) has accordingly been amended so as to include that the
Commissioner after giving a notice in writing to a registered dealer assess
the amount of net tax or any other tax payable or net tax credit of such dealer
in respect of a year or part thereof, where – (a) no return has been filed by
the dealer or (b) where there has been short payment of net tax or there
has been excess claim of tax credit or state Government has suffered loss
on account of such dealer or for any other reason to be recorded in
writing including for the purpose of refund of tax.
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Provided that (a) no assessment shall be made where a Provisional
assessment u/s 45 has been made (b) where a notice u/s 43(2) has been
issued (c) where a Special Audit has been made or will be made u/s 43(5A)
of the Act (d) where assessment is required to be made only under the CST
Act in respect of declaration Forms only commencing for Assessment period
from 1st April, 2010 and onwards and (e) where the dealer has closed his
business on and from 1st April, 2010 and where the Commissioner deems it
fit and proper.
Further provided that where a Provisional Assessment is Set Aside in
Appeal then re-assessment shall be made within 2 (two) years from the
date of passing of the Appeal or Revisional order.
Further, as per provision of section 46(1A) of the Act nothing contained in
subsection (1) will restrict Commissioner or a person appointed by him to
carry out assessment under this section for any return period ending on or
before the 31st day of March, 2012 where the proceeding for such
assessment, or for audit u/s 43 for such period, is has been initiated on or
before the 30th June, 2013.
24.The period of Limitation of Assessment of Dealers who has filed his
return under fifth proviso to section 32(2) of the Act then such
assessment has to be completed within 31st December, 2013.
25.A dealer enjoying Compounding Scheme for payment of taxes in terms of
section 16(4) or section 18(4) shall not issue a Tax Invoice as required
under the provisions of section 64(1) of the Act.
26.Section 84 has been amended so as to state “in disposing of such appeal”
in place of the word “in disposing of any appeal”.
27.Section 87(1) has been amended and accordingly after the second proviso a
new Proviso has been inserted which states that “a Revision will be accepted
by the Revisional Authority (to be constituted by the Commissioner) if it
has been filed against an order passed u/s 84(1) of the Act only if the
Revisionist has paid 10% of the Disputed Amount of Tax, Interest and
Late Fee or Rs.5,00,000/- whichever is less before filing of the Revision
application.
28.Accordingly a Proviso to Section 87A has been inserted which states that
such Revisional Authority (newly constituted) can Review its own order
either on its own motion or on the basis of an application made before it or
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by any similar authority to which the matter has been assigned to by the
Commissioner.
29.In Schedule “C” for the word ‘List of goods taxable @4% substitute 5%’ and
in Schedule “CA for the word ‘List of goods taxable @13.50% substitute
14.50%’. Similarly in Schedule “D” for the item ‘Chewing Tobacco, and Pan
Masala of any type when sold in a packaged codition, Cigar, Cheroot and
Cigarettes the rate of Tax has been enhanced from 20% to 25% [Schedule
D].
30.A dealer being a Works Contractor who is availing Composition Scheme as
per provisions of Section 18(4) of the Act will henceforth pay taxes @3% in
place of 2%.
31.A Contractee will henceforth deduct Tax @3% in place of 2% if the
Contractor is a Registered Dealer and if not then @5% in place of earlier
4%.
32.In respect to MRP rate of Tax following table will substitute the earlier table:
Description of the Nature of Goods Where MRP is
Where MRP is
Inclusive of Tax Exclusive of Tax
1. Drugs and Medicines …….
4.76%
2. Chemical Fertilizers like pesticides,
Insecticides ………
4.76%
3. Aerated Water and Beverages…. 12.66%
4. Mineral Water
12.66%
5. LPG :
(a) For Industrial Use
4.76%
(b) For any other purpose
12.66%
6. Lubricants
12.66%
7. Dietary Supplements including
Nutritional supplements,
protein supplements and
and health food as manufactured
by Pharmaceuticals Industries
12.66%
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5%
5%
14.50%
14.50%
5%
14.50%
14.50%
14.50%
C. Changes in The West Value Added Tax Rules, 2005.
1. After sub-rule (1) of Rule 6B a new Proviso has been added where in eRegistration will be granted immediately within 2 (two) working days
from the date of application or of furnishing of Security Deposit of Rs.10
Lakhs if such dealer is a Company incorporated 1 (one) year back or is
registered Sales Tax Dealer in other State or is Registered with Service Tax
Authorities. The said Security Deposit will be adjusted immediately with its
tax liability.
2. In Rule 17 a amendment has been made for Enrolment of a Transporter,
Carrier or Transporting Agent to apply immediately as per provisions of
Section 25 who has already a certificate in Form No 10 in its possession
for Enrolment as Official Transporter, Carrier or Transporting Agent in
electronic mode and then by surrendering within 5 days the Form No 10
(paper form) with a Fee of Rs.100/-. Such fresh Certificate of Enrolment
must be displayed at conspicuous place of his business.
3. In Rule 20(1)(ca) a Contractor will not claim Input Tax Credit on Tax
Invoices raised by a sub-contractor upon him if such Contractor has
claimed deduction u/s 18(2)(c) of the Act.
4. In Rule 20(1)(f) a dealer who pays taxes at Compounding scheme will not
claim Input Tax Credit on Tax Invoices received from a supplier as per
provisions of Section 16(1) of the Act.
5. Rule 26C has been omitted in respect of Sales made to Canteen Stores
Department or to Regimental or Unit run Canteen.
6. Rule 26K has been reinstated to allow a person to claim deduction of 50%
from his Turnover u/s 16(1)(c) of the Act and then to charge tax @5%
on sale of Pre-used / pre-owned Motor Vehicles including Two Wheelers
and shall produce on Demand to the appropriate authority under the Act
furnish the relevant Tax Invoice or Invoice or Cash Memo or Bill and
other related documents evidencing such sale.
7. In the table provided in Rule 30(2) in column No 4 the rate of Tax will be
5% and 14.50% for caluculation purpose. Similarly for Repair or
Maintenance or Servicing of Any Motor Vehicle including Two
Wheelers Motor Cycle, Scooter, etc the percentage specified is 20%,
40% & 40% [Serial No. 20A]. Similarly, Serial No. 17 for Dying and
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Printing of Textiles the Labour Charges amount has been reduced from
60% to 40% and tax @14.50% has been enhanced from 40% to 60%.
8. In Rule 30B in order to allow the claim in future the Contractor will be
required to produce a Certificate from the Sub-Contractor stating the
details of Purchase, like description of goods, quantity, Invoice No, with
date, amount and tax, name of selling dealer with his address and TIN
No.
9. Sub-Rule 2C of Rule 34 has been amended to include a Composite Dealer
eligible u/ 16(3) of the Act to pay taxes at the rate of 0.25%. Similarly the
proviso has also been changed.
10.Sub-Rule 3A has been inserted in Rule 34A wherein a dealer who has
been selected for Digital Signature and has obtained Digital Signature as per
provisions of Information Technology Act, 2000 has to file their return
within 15 days from the end of the month following a quarter provided his
Turnover of Sales is below Rs.1 Crore in the preceding financial year and
within 22nd day from the end of the month following a quarter provided his
Turnover of Sales in the last financial year was above Rs.1 Crore but below
Rs.5 Crores. On the same principle the provisions of Sub-Rule (4) has also
been amended. Further, Sub-rule (4) of Rule 34AA has also been amended.
11.Sub-rule (3) & (3A) of Rule 38 has been amended accordingly for payment
of taxes @0.25% or Rs.7,000/- or Rs.12,000/- as the case may be for
Composite dealer paying taxes as per provisions of section 16(3) of the Act.
12.Sub-rule (3) of Rule 39 has been amended accordingly for payment of taxes
@3% in place of 2% for Contractors availing payment of taxes at Composite
Scheme as per provisions of section 18(4) of the Act.
13.In consonance with amendment of Section 30E, Rule 44 has also been
amended to make VAT Audit for financial year 2013-2014 for a Turnover
exceeding Rs.5 Crore.
14.In consonance with amendment of Section 40, Rule 46XA has also been
amended to deduct Tax at Source @3% in place of 2% and @5% in place of
4% where ever applicable.
15.In consonance with amendment made in Section 43, Rule 54A has also been
amended in respect of dealers selected for Special Audit by the Department
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16.In consonance with amendment made in Section 63, Rule 87 has also been
amended in respect of dealers wherein place of the word “Shall” the word
“may” has been substituted. Further, a dealer availing Compounding Scheme
as per provisions of Section 16(3) will not be required to maintain accounts,
registers, etc as called for in this rule except what is being maintained by him
under the generally accepted accounting principles.
17. Rule 107 & Rule 108 has been amended to include that henceforth for
intrastate as well as interstate movement of goods apart from Cash
Memorandum Two copies of Stock Transfer Advices / Notes should also
accompany the consignment.
18.Rule 141 has been amended so as to include that along with Appeal Petition
in Form No 68, the Stay Petition has to be filed. The stay will be deemed to
be granted till disposal of Appeal Petition. Provided further that if the
Appellate Authority finds that there has been short payment of Admitted
Tax, Interest, Penalty & Late Fee, then such appellate authority will direct
the appellant to pay the said amount and after such payment only the balance
amount of disputed tax, interest, penalty and late fee will be stayed.
19.Rule 156(1) has been amended so as to apply mutatis mutandis in respect of
Revision Petition filed by the Assessing Officer u/s 88A on being
aggrieved by an appeal order passed against his assessment order.
20.Form No 68 has been amended so as to include in place of “Documents
attached / submitted along with” the word “Prayer for stay of realization of
disputed demand and Documents attached / submitted along with” and
for item (a) I pray for stay of realization of disputed demand / I do not
pray for stay of realization of disputed demand.
CA RIP DAS
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