Date : / 10/08/1994
Subject : / Clarification on Rate of Tax on Oils extracted from oil seed & vegetable Oil
In the representation third cited, the Andhra Pradesh Oil Miller`s Association Limited while referring the G.Os cited have sought for certain clarifications on the subject and the following clarifications are issued, item-wise:
1. It was stated that as per the Notification - I the rate of tax on oil seeds has been reduced to 2 paise under Section 9 of the A.P. General Sales Tax Act and in the absence of any reference to the charging Section 6 in respect of declared goods, no other taxes i.e., Additional Tax and Surcharge could be levied on Oil Seeds.
In this connection, it is informed that Notification - I of G.O.Ms.No. 74 Rev. Dt. 28.1.1994 has been issued reducing the tax leviable under the APGST Act to two paise under the Act. Hence, the additional tax and surcharge cannot be levied in addition.
2. Whether the orders issued in Notification III is applicable in respect of (i) Rice Bran Oil which is obtained from Rice Bran, an oil bearing material (ii) Solvent Extracted Oil.
In this connection it is informed that vide Notification III of G.O.Ms.No. 74 Rev. Dt. 28.1.94 the concession has been given to the vegetable oils obtained from tax suffered oil seeds only and since the Rice Bran and Solvent Extracted Oils are not Oil Seeds and the concession is not available to them.
3. Whether all the vegetable oils are eligible to tax at 2 paise, if they are imported from outside the State.
In this connection it is informed that the G.O.Ms.No. 74 has been issued only to vegetable oils obtained from Oil Seeds which have suffered State tax, hence, the concessional rate is not applicable to vegetable oils imported into the State, the seeds which have not met tax under A.P. General Sales Tax Act.
4. Whether an importer of Oil Seeds, for example, Sunflower or Mustered Seed on which there is no liability at the hands of importer crushed them into oil is entitled to tax at 2 paise in the rupee at the point of sale at his hands.
In this connection, it is informed that the concession granted vide Notification - III of G.O.Ms.No. 74 Dt. 28.1.94 is available only when the Oil Seeds are met with State tax in Andhra Pradesh. Hence, the concession is not available.
5. Vide G.O.Ms.No. Dt. 28.1.94, the rate of tax on all vegetable oils is reduced to one paise in the rupee with reference to Section 8(1) of the Central Sales Tax Act, exercising the powers under Section 8(5) of the CST Act and it is presumed that the gross and net rate of tax will be one paise in the rupee subject to the production of ` C` form and if additional tax and surcharge is also levied, rate of tax will workout to 3.85, whereas the normal rate of tax is 4% only, so the purpose of issuing notification will be negatived.
In this connection, the attention is invited to A.P. STAT orders in T.A. No. 984/87 Dt. 8.10.1987 (Page 248/Vol.5 of APSTJ) which is extracted below:
`The question that arose for consideration in this Appeal is whether additional tax could be levied on inter-State sales of Cement over and above the rate stipulated in G.O.Ms.No. 76 Rev. Dt. 24.1.1987. The Govt. by the said G.O. reduced the rate of tax on inter-State sales of Cement to 2% with or without `C` form with effect from 1.1.87. The Revenue relied on the decision in 64 STC 435 and levied additional tax. It was contended on behalf on the Appellants that the tax prescribed under notification issued under Section 8(5) is alone the tax payable on inter-State sales. The Tribunal held that additional tax leviable under Section 5A in respect of the goods liable to tax under APGST Act cannot be made applicable to the reduced tax levied under Notification issued under Section 8(5) in so far as the inter-State sales` .
In view of the above, it is informed that the G.O.Ms.No. 75 Dt. 28.1.94 has been issued under Section 8(5) and with reference to Section 8(1) of CST Act and the rate of tax mentioned in the section is four per cent is of general in nature i.e., highest rate, whereas, the G.O. provides lesser rate, hence, tax shall be levied at reduced rate, without additional tax and surcharge thereon.
The receipt of the reference may be acknowledged to next higher authority, immediately.
References:
- THE CENTRAL SALES TAX ACT, 1956 Section 8