Drafted and Compiled by CA Rip Das

for circulation amongst members on SEMINAR ORGANISED BYEASTERN INDIA REGIONAL COUNCIL OF The Institute of CharteredAccountants of India ON 27THAPRIL, 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 Officesof 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.

  1. 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.
  1. 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 (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.
  1. 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.
  1. 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.
  1. After Section 10 a new Proviso has been inserted where in a Director or Secretary or Manager of a Companyfails 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.
  1. 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.
  1. 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.
  1. 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.
  1. In Clause (b) of sub-section (2) of Section 16 the rate of tax has been enhanced from 4% to 5%.
  1. Similarly in Clause (ba) of sub-section (2) of Section 16 the rate of tax has been enhanced from 13.50% to 14.50%.
  1. 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.
  1. The option to pay taxes at Compounding Rate as per provisions of Sub-section (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.
  1. Due to increase of rate of tax clause (a) of sub-section (1) of Section 18has been amended and the rate of tax has been enhanced from 4% to 5%.
  1. Similarly in clause (aa) of sub-section (1) of Section 18 the rate of tax has been enhanced from 4% to 5%.
  1. Similarly in clause (b) of sub-section (1) of Section 18 the rate of tax has been enhanced from 13.50% to 14.50%.
  1. The option to pay taxes at Compounding Rate as per provisions of Sub-section (4) of Section 18once 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.
  2. 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.
  1. 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.
  1. 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 Agentfails 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.
  1. 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.
  1. 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.
  1. 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 sub-divisions 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 30th 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.
  1. Similarly for the above dealers Section 33 has also been amended for non payment of Interest.
  1. 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.
  1. 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.
  1. 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.
  1. 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.

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.

  1. 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.
  1. 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.
  1. Section 84 has been amended so as to state “in disposing of such appeal” in place of the word “in disposing of any appeal”.
  1. 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.
  1. 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 by any similar authority to which the matter has been assigned to by the Commissioner.
  1. 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].
  1. 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%.
  1. 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%.
  1. 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% 5%
  2. Chemical Fertilizers like pesticides,

Insecticides ……… 4.76% 5%

  1. Aerated Water and Beverages…. 12.66% 14.50%
  2. Mineral Water 12.66% 14.50%
  3. LPG :

(a)For Industrial Use 4.76% 5%

(b)For any other purpose 12.66% 14.50%

  1. Lubricants 12.66% 14.50%
  2. Dietary Supplements including

Nutritional supplements,

protein supplements and

and health food as manufactured

by Pharmaceuticals Industries 12.66% 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 e- Registration 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.
  1. 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.
  1. 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.
  1. 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.
  1. Rule 26C has been omitted in respect of Sales made to Canteen Stores Department or to Regimental or Unit run Canteen.
  1. 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.
  1. 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, etcthe percentage specified is 20%, 40% & 40% [Serial No. 20A]. Similarly, Serial No. 17 for Dying and 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%.
  1. In Rule 30Bin 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.
  1. 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.
  1. Sub-Rule 3A has been inserted in Rule 34Awhereina 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.
  1. 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.
  1. 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.
  1. 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.
  1. 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.
  1. 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
  1. 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.
  1. 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.
  1. 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.
  1. Rule 156(1) has been amended so as to apply mutatis mutandis in respect of Revision Petition filed by the Assessing Officeru/s 88A on being aggrieved by an appeal order passed against his assessment order.
  1. 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