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C.V.O. Chartered & Cost Accountants' Association

Legal Updates
Sales Tax Update

Compiled by : Shri Bharat K. Gosar (C.A.)
Shri Nitin D. Kenia (C.A.)

NOTIFICATIONS UNDER B.S.T. ACT AND OTHER ALLIED ACTS.

1) The Government of Maharashtra has introduced L.A. Bill No. LX of 2002 so as to replace exiting The Bombay Sales Tax Act 1959 by The Maharashtra Value Added Tax Act, 2002 with effect from 01.04.2003.

2) No. STR 12.02/CR-162/Taxation -1 Dated 16.11.2002
By this notification, the Government of Maharashtra has inserted new rule 31D in B.S.T. Rules which prescribes manner of determination of net present value for the pre payment of tax by an eligible unit under deferment scheme, to be paid in-lieu of the deferred tax, for the purpose of fourth proviso to Section 38(4) of B.S.T. Act.

3) No. STA 2002/CR.24/Taxation-2 dated 20.11.2002
Under this notification , the Government has deleted with effect from 20.11.2002 notification entries A-31, 38, 40, 43, 56, 93, 96(21)(31)(32), C-9, 20,27,F-3, 4, J-1, L-2, 9 issued earlier under Section 41 .

4) No. ENR-16.02/CR174/Tax-1 dated 22.11.2002
By this resolution government has introduced the rules and forms to carry out Maharashtra Tax on the Entry of Goods into Local Areas Rules, 2002.

5) No. STR-12.03/CR.2/Taxation-1 dated 01.01.2003
By this notification, the government has amended various Rules
Amendment to Rule 42M, 46A, 53 and substitution of Rule 46C : With effect from 01.10.2002 the dealer who purchases goods covered by schedule entry B-6 without payment of tax from the dealer situated in backward area can collect the tax separately on his sales price and the dealer buying such goods can claim set off under these Rules. In rule 44AA Proviso is added with retrospective effect from 01.05.2002. An authorised dealer who has purchased goods from another authorised dealer cannot claim set off of turnover tax in excess of the amount of turnover tax payable on his corresponding sales.

6) No. STR-11.00/CR-85/Taxation dated 21.01.2003
Rule 41 G is amended so that, manufacturer of cotton yarn specified in entry B-3 can claim set off of tax paid from 13.01.2000 instead of from 22.01.2000.

7) No. STA.2002/CR-51/Taxation-2 dated 30.01.2003
Notification entry A-47 is amended from 01.02.03. Bullion and specie covered by Schedule entry C-I-10 and articles made from gold or silver as specified in Schedule entry C-II-97 will attract sales tax @ 1%. Exemption from turnover tax and surcharge is continued.

Notification u/s 8(5) of the Central Sales Tax Act.

8) No. CST. 2001/CR 77 /Tax.2 dated 09.12.2002
Rate of C.S.T. is reduced to 2 % on inter-state sale of purified terephthalic acid (PTA) effected by the dealer of Maharashtra with effect from 11.05.2002.

CIRCULARS ISSUED BY THE COMMISSIONER OF SALES TAX

1) Circular No. 35T of 2002 dated 18.11.02
In this circular, the Commissioner has clarified certain issues which are arisen in regard to the amnesty scheme declared under the Profession Tax Act.

2) Circular No. 36T of 2002 dated 09.12.02
The Commissioner has explained the procedural aspects relating to registration, payment of taxes, assessment , appeals etc, rate of fees to be paid, under the newly introduced Entry Tax Ordinance on petroleum products.

3) Circular No. 37T of 2002 dated 09.12.2002
Date for filing application for registration, payment of tax and filing of return under the Entry Tax Act is extended to 24.12.2002.

4) Circular No. 39T of 2002 dated 12.12.2002
The Commissioner has announced the scheme for the eligible units which have opted the deferment scheme, to make early payment of tax at discounted NPV rate.

5) Circular No. 40T of 2002 dated 13.12.2002
The Commissioner has given strict instruction to the lower authorities to grant interest u/s 43A and u/s 44A in case of refunds.

6) Circular No. 41T of 2002 dated 30.12.2002
In this Circular, the Commissioner has explained certain modifications effected while passing the Entry Tax Ordinance in the State Legislature.

7) Circular No. 42T of 2002 dated 31.12.2002
By this circular, the Commissioner has explained in detail the amendments made in Rule 22 and Rule 23 of B.S.T. Rules regarding filing of returns.

8) Circular No. 43T of 2002 dated 31.12.2002
The Commissioner has instructed lower authorities to initiate prosecution action against the dealers who have not filed annual returns.

9) Circular No. 1T of 2003 dated 01.01.2003
The Government of Maharashtra has deleted 17 notification entries u/s. 41 with effect from 20.11.2002. In this circular, the Commissioner has drawn the attention towards the new applicable sales tax rate on such goods after deletion of notification entries.

10) Circular No. 2T of 2003 dated 03.01.2003
In this Circular, the Commissioner has explained further amendments to rules 42M, 46C and other rules related to the VAT on Iron & Steel goods which is to be implemented from 01.10.2002. The Commissioner has explained with examples various propositions arising out of the amendments.

11) Circular No. 3T of 2003 dated 06.01.2003
The date extended vide Circular No.37T of 2002 dt. 09.12.2002 under entry tax Act is further extended to 25.01.2003.

12) Circular No. 4T of 2003 dated 07.01.2003
After introduction of turnover tax and surcharge from 01.04.1999, effective rate of tax becomes 5.4 % for goods having sales tax rate of 4%. In such cases, it was necessary for the selling dealer to obtain 'C' form to get benefit of concessional rate CST @4 %. However, many such dealers have not collected 'C' forms. Therefore, the Commissioner has dispensed with the requirement of producing 'C' form at the time of assessment where rate of tax is 5.4%. However, the assessing authorities will levy full tax as if no 'C' form is produced. Thereafter, the dealer will have to make an application to the Deputy Commissioner (Adm) for grant of relief for difference of tax and interest. Relief will be granted for the assessments for the period 01.04.1999 to 31.03.2002.

13) Circular No. 5T of 2003 dated 18.01.2003
The Commissioner has extended the benefit of earlier Works Contract amnesty scheme to those dealers who have made the payment of the Works Contract tax on or before 30.04.1999 for the assessment period 01.04.1998 to 31.03.1999.

14) Circular No. 6T of 2003 dated 22.01.2003
The Commissioner has appealed to the persons who are not liable for payment of profession tax due to discontinuation of business/profession, completion of 65 years or death etc.and are still getting courtesy letters or notices, to apply for cancellation.